[{"data":1,"prerenderedAt":6795},["Reactive",2],{"/":3},{"data":4,"headers":6767,"perPage":6793,"total":6794},{"stories":5,"cv":6764,"rels":6765,"links":6766},[6,776,1411,2213,2816,3588,4525,5346,5883],{"name":7,"created_at":8,"published_at":9,"updated_at":10,"id":11,"uuid":12,"content":13,"slug":766,"full_slug":767,"sort_by_date":69,"position":768,"tag_list":769,"is_startpage":28,"parent_id":770,"meta_data":69,"group_id":771,"first_published_at":772,"release_id":69,"lang":773,"path":774,"alternates":775,"default_full_slug":69,"translated_slugs":69},"Does Credit Score Affect Car Insurance?","2025-04-07T18:30:23.044Z","2025-12-26T13:44:59.193Z","2025-12-26T13:44:59.266Z",651798161,"5fa3b7df-270c-4450-9cf2-1a6e969bf719",{"seo":14,"_uid":20,"hero":21,"author":30,"category":31,"featured":28,"imageAlt":18,"component":32,"blogContents":33,"canonicalTag":763,"publishedDate":764,"_editable":765},{"_uid":15,"title":16,"plugin":17,"og_image":18,"og_title":18,"description":19,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"77316249-bb90-485a-9a34-facfdf611141","Does Credit Score Affect Car Insurance? | Navient Marketplace","seo_metatags","","Your credit score can impact your car insurance rate. Learn how credit-based insurance scores work, and what you can do about it.","39f3568e-f888-4c3e-816f-3647f7efec59",[22],{"id":18,"_uid":23,"image":24,"intro":19,"classes":18,"_editable":25,"blogTitle":7,"component":26,"imageLink":27,"blendImage":28,"backgroundColor":29},"ee81b4ff-6c03-4123-98ae-73405dea4592","//a.storyblok.com/f/110029/4800x3200/737bc2c543/does-credit-score-affect-car-insurance.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798161\"}-->","NriBlogHero","/images/does-credit-score-affect-car-insurance.png",false,"#F6F2F7","grace-guido","Insurance","NriBlogPost",[34],{"_uid":35,"color":36,"richText":37,"_editable":761,"component":762},"67b1c1a7-fbb7-4c3c-a267-87dc959687fb","#444444",{"type":38,"content":39},"doc",[40,55,82,89,101,117,126,133,184,185,192,213,222,229,307,308,315,324,351,372,379,424,425,432,441,448,455,476,485,506,599,608,615,723,732,752],{"type":41,"content":42},"paragraph",[43],{"text":44,"type":45,"marks":46},"Navient may receive compensation when you click on links associated with this Navient Marketplace. Navient is not being compensated for any application, quotation, or the purchase of any financial products.","text",[47,51],{"type":48,"attrs":49},"styled",{"class":50},"footer-text",{"type":52,"attrs":53},"textStyle",{"color":54},"rgb(0, 0, 0)",{"type":41,"content":56},[57,62,77],{"text":58,"type":45,"marks":59},"Car insurance can be a considerable expense, and you may be wondering how your credit score can impact your car insurance rate. On average, a driver with bad credit will ",[60],{"type":52,"attrs":61},{"color":54},{"text":63,"type":45,"marks":64},"pay 71% more",[65,72,75],{"type":66,"attrs":67},"link",{"href":68,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.carinsurance.com/worst-states-for-drivers-with-bad-credit",null,"_blank","url",{"type":52,"attrs":73},{"color":74},"rgb(17, 85, 204)",{"type":76},"underline",{"text":78,"type":45,"marks":79}," than a driver with good credit. That can come out to about $1,000 more annually. ",[80],{"type":52,"attrs":81},{"color":54},{"type":41,"content":83},[84],{"text":85,"type":45,"marks":86},"In addition to your credit history, several factors contribute to your rate, including your age, driving habits, and car type. ",[87],{"type":52,"attrs":88},{"color":54},{"type":90,"attrs":91,"content":93},"heading",{"level":92},2,[94],{"text":95,"type":45,"marks":96},"How Does Credit Score Affect Insurance Rates? ",[97,99],{"type":98},"bold",{"type":52,"attrs":100},{"color":54},{"type":41,"content":102},[103,112],{"text":104,"type":45,"marks":105},"90% of auto insurance companies",[106,109,111],{"type":66,"attrs":107},{"href":108,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://lawecommons.luc.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1169&context=lclr",{"type":52,"attrs":110},{"color":74},{"type":76},{"text":113,"type":45,"marks":114}," consider a driver’s credit history when determining insurance rates. Drivers with good credit are much more likely to receive a better insurance rate than drivers with poor credit. It can be the difference of hundreds of dollars a month. ",[115],{"type":52,"attrs":116},{"color":54},{"type":90,"attrs":118,"content":119},{"level":92},[120],{"text":121,"type":45,"marks":122},"How Is Your Credit Score Calculated? ",[123,124],{"type":98},{"type":52,"attrs":125},{"color":54},{"type":41,"content":127},[128],{"text":129,"type":45,"marks":130},"A number of factors determine your FICO credit score: ",[131],{"type":52,"attrs":132},{"color":54},{"type":134,"attrs":135,"content":137},"ordered_list",{"order":136},1,[138,148,157,166,175],{"type":139,"content":140},"list_item",[141],{"type":41,"content":142},[143],{"text":144,"type":45,"marks":145},"Payment history: 35%",[146],{"type":52,"attrs":147},{"color":54},{"type":139,"content":149},[150],{"type":41,"content":151},[152],{"text":153,"type":45,"marks":154},"Debt owed: 30%",[155],{"type":52,"attrs":156},{"color":54},{"type":139,"content":158},[159],{"type":41,"content":160},[161],{"text":162,"type":45,"marks":163},"Length of credit history: 15%",[164],{"type":52,"attrs":165},{"color":54},{"type":139,"content":167},[168],{"type":41,"content":169},[170],{"text":171,"type":45,"marks":172},"Types of credit used: 10%",[173],{"type":52,"attrs":174},{"color":54},{"type":139,"content":176},[177],{"type":41,"content":178},[179],{"text":180,"type":45,"marks":181},"New credit: 10%",[182],{"type":52,"attrs":183},{"color":54},{"type":41},{"type":41,"content":186},[187],{"text":188,"type":45,"marks":189},"Credit scores range from 300 to 850. A higher credit score indicates a better credit history. With a higher credit score, you can expect lower rates on credit and better chances of credit approval. ",[190],{"type":52,"attrs":191},{"color":54},{"type":41,"content":193},[194,199,208],{"text":195,"type":45,"marks":196},"You can ",[197],{"type":52,"attrs":198},{"color":54},{"text":200,"type":45,"marks":201},"check your credit report",[202,205,207],{"type":66,"attrs":203},{"href":204,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.annualcreditreport.com/index.action",{"type":52,"attrs":206},{"color":74},{"type":76},{"text":209,"type":45,"marks":210}," once a year from each of the three credit bureaus for free. ",[211],{"type":52,"attrs":212},{"color":54},{"type":90,"attrs":214,"content":215},{"level":92},[216],{"text":217,"type":45,"marks":218},"How To Improve Your Credit Score",[219,220],{"type":98},{"type":52,"attrs":221},{"color":54},{"type":41,"content":223},[224],{"text":225,"type":45,"marks":226},"Improving your credit score can make a major difference if you are looking for ways to reduce your auto insurance rate. Here are some ways to improve your credit score over time: ",[227],{"type":52,"attrs":228},{"color":54},{"type":134,"attrs":230,"content":231},{"order":136},[232,242,252,278,297],{"type":139,"content":233},[234],{"type":41,"content":235},[236],{"text":237,"type":45,"marks":238},"Make all credit payments on time",[239,240],{"type":98},{"type":52,"attrs":241},{"color":54},{"type":139,"content":243},[244],{"type":41,"content":245},[246],{"text":247,"type":45,"marks":248},"Pay off all late payments as soon as possible ",[249,250],{"type":98},{"type":52,"attrs":251},{"color":54},{"type":139,"content":253},[254],{"type":41,"content":255},[256,262,272],{"text":257,"type":45,"marks":258},"Lower your ",[259,260],{"type":98},{"type":52,"attrs":261},{"color":54},{"text":263,"type":45,"marks":264},"debt-to-income ratio",[265,268,269,271],{"type":66,"attrs":266},{"href":267,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-debt-to-income-ratio-en-1791/",{"type":98},{"type":52,"attrs":270},{"color":74},{"type":76},{"text":273,"type":45,"marks":274}," by paying off current debt",[275,276],{"type":98},{"type":52,"attrs":277},{"color":54},{"type":139,"content":279},[280],{"type":41,"content":281},[282,291],{"text":283,"type":45,"marks":284},"Check your credit report",[285,287,288,290],{"type":66,"attrs":286},{"href":204,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":98},{"type":52,"attrs":289},{"color":74},{"type":76},{"text":292,"type":45,"marks":293}," to ensure all credit information is accurate",[294,295],{"type":98},{"type":52,"attrs":296},{"color":54},{"type":139,"content":298},[299],{"type":41,"content":300},[301],{"text":302,"type":45,"marks":303},"Refrain from taking on additional debt",[304,305],{"type":98},{"type":52,"attrs":306},{"color":54},{"type":41},{"type":41,"content":309},[310],{"text":311,"type":45,"marks":312},"Improving your credit score can seem like a daunting and time-consuming task. However, it will be worth it in the long run. You can potentially lower your auto insurance rate and improve loan terms and rates across all credit types. ",[313],{"type":52,"attrs":314},{"color":54},{"type":90,"attrs":316,"content":317},{"level":92},[318],{"text":319,"type":45,"marks":320},"Credit Score vs. Credit-Based Insurance Score",[321,322],{"type":98},{"type":52,"attrs":323},{"color":54},{"type":41,"content":325},[326,331,340,345],{"text":327,"type":45,"marks":328},"In most states, car insurance companies will calculate a ",[329],{"type":52,"attrs":330},{"color":54},{"text":332,"type":45,"marks":333},"credit-based auto insurance score",[334,337,339],{"type":66,"attrs":335},{"href":336,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://disb.dc.gov/page/how-insurance-company-can-use-your-credit-score-determine-your-premium",{"type":52,"attrs":338},{"color":74},{"type":76},{"text":341,"type":45,"marks":342}," using your credit history. In states where it is a legal practice, ",[343],{"type":52,"attrs":344},{"color":54},{"text":346,"type":45,"marks":347},"your credit-based auto insurance score will be a factor used to determine your rates. ",[348,349],{"type":98},{"type":52,"attrs":350},{"color":54},{"type":41,"content":352},[353,358,367],{"text":354,"type":45,"marks":355},"A ",[356],{"type":52,"attrs":357},{"color":54},{"text":359,"type":45,"marks":360},"commonly cited Federal Trade Commission study",[361,364,366],{"type":66,"attrs":362},{"href":363,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.ftc.gov/sites/default/files/documents/reports/credit-based-insurance-scores-impacts-consumers-automobile-insurance-report-congress-federal-trade/p044804facta_report_credit-based_insurance_scores.pdf",{"type":52,"attrs":365},{"color":74},{"type":76},{"text":368,"type":45,"marks":369}," shows the correlation between credit and the likelihood that a driver will file for insurance claims. Since drivers with better credit are statistically less likely to file a claim, they will receive better auto insurance rates than drivers with lower credit scores. ",[370],{"type":52,"attrs":371},{"color":54},{"type":41,"content":373},[374],{"text":375,"type":45,"marks":376},"Your credit-based auto insurance score is calculated differently than your credit score. Here is how insurers calculate your credit-based auto insurance score: ",[377],{"type":52,"attrs":378},{"color":54},{"type":134,"attrs":380,"content":381},{"order":136},[382,391,399,407,415],{"type":139,"content":383},[384],{"type":41,"content":385},[386],{"text":387,"type":45,"marks":388},"Payment history: 40%",[389],{"type":52,"attrs":390},{"color":54},{"type":139,"content":392},[393],{"type":41,"content":394},[395],{"text":153,"type":45,"marks":396},[397],{"type":52,"attrs":398},{"color":54},{"type":139,"content":400},[401],{"type":41,"content":402},[403],{"text":162,"type":45,"marks":404},[405],{"type":52,"attrs":406},{"color":54},{"type":139,"content":408},[409],{"type":41,"content":410},[411],{"text":180,"type":45,"marks":412},[413],{"type":52,"attrs":414},{"color":54},{"type":139,"content":416},[417],{"type":41,"content":418},[419],{"text":420,"type":45,"marks":421},"Types of credit used: 5%",[422],{"type":52,"attrs":423},{"color":54},{"type":41},{"type":41,"content":426},[427],{"text":428,"type":45,"marks":429},"There are states that prohibit the use of credit in determining car insurance rates. California, Michigan, Hawaii, and Massachusetts have made this practice illegal. However, in all other states, your credit-based auto insurance score and credit history can be used as a factor in determining your rate. ",[430],{"type":52,"attrs":431},{"color":54},{"type":90,"attrs":433,"content":434},{"level":92},[435],{"text":436,"type":45,"marks":437},"How Getting A Car Insurance Quote Will Impact Your Credit Score",[438,439],{"type":98},{"type":52,"attrs":440},{"color":54},{"type":41,"content":442},[443],{"text":444,"type":45,"marks":445},"Insurance quotes will not hurt your credit score. Insurers will check your credit during the process of determining your insurance quote, but it will be a soft pull.",[446],{"type":52,"attrs":447},{"color":54},{"type":41,"content":449},[450],{"text":451,"type":45,"marks":452},"A soft pull does not show up on your credit report or hurt your credit score. A hard pull, however, will hurt your credit score if you have many within a short period of time. The hard pull will impact your credit because you are actively applying for credit, whereas a soft pull is used for preapproved offers. ",[453],{"type":52,"attrs":454},{"color":54},{"type":41,"content":456},[457,462,471],{"text":458,"type":45,"marks":459},"Before getting a quote or applying for insurance, understand whether a ",[460],{"type":52,"attrs":461},{"color":54},{"text":463,"type":45,"marks":464},"soft or hard credit pull",[465,468,470],{"type":66,"attrs":466},{"href":467,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.sba.gov/blog/credit-inquiries-what-you-should-know-about-hard-soft-pulls",{"type":52,"attrs":469},{"color":74},{"type":76},{"text":472,"type":45,"marks":473}," is required. ",[474],{"type":52,"attrs":475},{"color":54},{"type":90,"attrs":477,"content":478},{"level":92},[479],{"text":480,"type":45,"marks":481},"Other Factors That Determine Your Auto Insurance Rate",[482,483],{"type":98},{"type":52,"attrs":484},{"color":54},{"type":41,"content":486},[487,492,501],{"text":488,"type":45,"marks":489},"Besides your credit-based auto insurance score, there are ",[490],{"type":52,"attrs":491},{"color":54},{"text":493,"type":45,"marks":494},"several other factors",[495,498,500],{"type":66,"attrs":496},{"href":497,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.opic.texas.gov/news/car-insurance-rate/",{"type":52,"attrs":499},{"color":74},{"type":76},{"text":502,"type":45,"marks":503}," that impact your insurance rate: ",[504],{"type":52,"attrs":505},{"color":54},{"type":507,"content":508},"bullet_list",[509,524,539,554,569,584],{"type":139,"content":510},[511],{"type":41,"content":512},[513,519],{"text":514,"type":45,"marks":515},"Driving record: ",[516,517],{"type":98},{"type":52,"attrs":518},{"color":54},{"text":520,"type":45,"marks":521},"Your driving history will greatly impact auto insurance rates. A clean record with no accidents or traffic violations will likely result in lower rates. ",[522],{"type":52,"attrs":523},{"color":54},{"type":139,"content":525},[526],{"type":41,"content":527},[528,534],{"text":529,"type":45,"marks":530},"Demographics: ",[531,532],{"type":98},{"type":52,"attrs":533},{"color":54},{"text":535,"type":45,"marks":536},"Age, gender, and marital status may impact your insurance rates. Younger and less experienced drivers will have higher insurance rates because they are considered to be a greater risk.",[537],{"type":52,"attrs":538},{"color":54},{"type":139,"content":540},[541],{"type":41,"content":542},[543,549],{"text":544,"type":45,"marks":545},"Where you live: ",[546,547],{"type":98},{"type":52,"attrs":548},{"color":54},{"text":550,"type":45,"marks":551},"Residing in a location with higher traffic or frequent accidents may raise your rates. ",[552],{"type":52,"attrs":553},{"color":54},{"type":139,"content":555},[556],{"type":41,"content":557},[558,564],{"text":559,"type":45,"marks":560},"Vehicle type: ",[561,562],{"type":98},{"type":52,"attrs":563},{"color":54},{"text":565,"type":45,"marks":566},"Make, model, year, and safety features of your car will be considered. More expensive vehicles may have higher insurance premiums. ",[567],{"type":52,"attrs":568},{"color":54},{"type":139,"content":570},[571],{"type":41,"content":572},[573,579],{"text":574,"type":45,"marks":575},"Usage: ",[576,577],{"type":98},{"type":52,"attrs":578},{"color":54},{"text":580,"type":45,"marks":581},"The purpose of your vehicle, whether for personal, commuting, or business reasons, can impact your rate. ",[582],{"type":52,"attrs":583},{"color":54},{"type":139,"content":585},[586],{"type":41,"content":587},[588,594],{"text":589,"type":45,"marks":590},"Type of insurance, coverage options, and deductibles: ",[591,592],{"type":98},{"type":52,"attrs":593},{"color":54},{"text":595,"type":45,"marks":596},"These factors are specific to the insurance plan. ",[597],{"type":52,"attrs":598},{"color":54},{"type":90,"attrs":600,"content":601},{"level":92},[602],{"text":603,"type":45,"marks":604},"How To Get A Better Deal On Your Car Insurance",[605,606],{"type":98},{"type":52,"attrs":607},{"color":54},{"type":41,"content":609},[610],{"text":611,"type":45,"marks":612},"If you are working on improving your credit score to get a more favorable insurance rate, there are some other steps you can take in the meantime: ",[613],{"type":52,"attrs":614},{"color":54},{"type":134,"attrs":616,"content":618},{"order":617},{"order":136},[619,648,663,678,693,708],{"type":139,"content":620},[621],{"type":41,"content":622},[623,629,634,643],{"text":624,"type":45,"marks":625},"Shop around for a better rate: ",[626,627],{"type":98},{"type":52,"attrs":628},{"color":54},{"text":630,"type":45,"marks":631},"You may be able to find a better deal on your car insurance. ",[632],{"type":52,"attrs":633},{"color":54},{"text":635,"type":45,"marks":636},"Use Navient Marketplace",[637,640,642],{"type":66,"attrs":638},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/",{"type":52,"attrs":641},{"color":74},{"type":76},{"text":644,"type":45,"marks":645}," to compare offers from insurance companies. ",[646],{"type":52,"attrs":647},{"color":54},{"type":139,"content":649},[650],{"type":41,"content":651},[652,658],{"text":653,"type":45,"marks":654},"Contact your insurance agent: ",[655,656],{"type":98},{"type":52,"attrs":657},{"color":54},{"text":659,"type":45,"marks":660},"Speak with your agent to see if there is anything you can do to lower your current rate. ",[661],{"type":52,"attrs":662},{"color":54},{"type":139,"content":664},[665],{"type":41,"content":666},[667,673],{"text":668,"type":45,"marks":669},"Practice responsible driving:",[670,671],{"type":98},{"type":52,"attrs":672},{"color":54},{"text":674,"type":45,"marks":675}," A clean driving record makes a driver less likely to file an insurance claim. You may qualify for discounts for going a certain number of years without any accidents or traffic tickets. ",[676],{"type":52,"attrs":677},{"color":54},{"type":139,"content":679},[680],{"type":41,"content":681},[682,688],{"text":683,"type":45,"marks":684},"Consider your car choice: ",[685,686],{"type":98},{"type":52,"attrs":687},{"color":54},{"text":689,"type":45,"marks":690},"If you are in the market for a new car, the type of car you get will impact your insurance rate. Some vehicles are more expensive to repair or more prone to theft. Before choosing a new car, check with your insurance company to see how that may change your rate. ",[691],{"type":52,"attrs":692},{"color":54},{"type":139,"content":694},[695],{"type":41,"content":696},[697,703],{"text":698,"type":45,"marks":699},"Get rid of unnecessary coverage:",[700,701],{"type":98},{"type":52,"attrs":702},{"color":54},{"text":704,"type":45,"marks":705}," Examine your insurance pricing and policy to see if you can cut down on unnecessary coverage such as comprehensive and collision coverage on older cars. ",[706],{"type":52,"attrs":707},{"color":54},{"type":139,"content":709},[710],{"type":41,"content":711},[712,718],{"text":713,"type":45,"marks":714},"Get a usage-based insurance (UBI) policy: ",[715,716],{"type":98},{"type":52,"attrs":717},{"color":54},{"text":719,"type":45,"marks":720},"UBI plans more accurately assess your risk and can lower your monthly payments. If you are a responsible driver and can cut back on driving, this type of plan may benefit you. ",[721],{"type":52,"attrs":722},{"color":54},{"type":90,"attrs":724,"content":725},{"level":92},[726],{"text":727,"type":45,"marks":728},"Compare Auto Insurance Offers",[729,730],{"type":98},{"type":52,"attrs":731},{"color":54},{"type":41,"content":733},[734,739,747],{"text":735,"type":45,"marks":736},"Navient Marketplace makes it easy to see auto insurance offers from top insurers. ",[737],{"type":52,"attrs":738},{"color":54},{"text":740,"type":45,"marks":741},"Compare auto insurance offers",[742,744,746],{"type":66,"attrs":743},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":745},{"color":74},{"type":76},{"text":748,"type":45,"marks":749}," on Navient Marketplace today! ",[750],{"type":52,"attrs":751},{"color":54},{"type":41,"content":753},[754],{"text":755,"type":45,"marks":756},"Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.",[757,759],{"type":48,"attrs":758},{"class":50},{"type":52,"attrs":760},{"color":54},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798161\"}-->","BlogText","https://www.marketplace.navient.com/blog/does-credit-score-affect-car-insurance/","Updated: September 20, 2023","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798161\"}-->","does-credit-score-affect-car-insurance","navient_marketplace/blog/does-credit-score-affect-car-insurance",-500,[],651751493,"db6c0fc2-18bf-4cc9-9d4e-298208cac91c","2023-09-26T16:17:12.664Z","default","blog/does-credit-score-affect-car-insurance/",[],{"name":777,"created_at":778,"published_at":779,"updated_at":780,"id":781,"uuid":782,"content":783,"slug":1404,"full_slug":1405,"sort_by_date":69,"position":768,"tag_list":1406,"is_startpage":28,"parent_id":770,"meta_data":69,"group_id":1407,"first_published_at":1408,"release_id":69,"lang":773,"path":1409,"alternates":1410,"default_full_slug":69,"translated_slugs":69},"What Happens if I Default on a Loan?","2025-04-07T18:30:21.356Z","2025-12-26T13:44:59.448Z","2025-12-26T13:44:59.477Z",651798159,"be1f223d-4435-4db6-9e3e-6c704c0ad5b6",{"seo":784,"_uid":20,"hero":787,"author":30,"category":792,"featured":28,"imageAlt":18,"component":32,"blogContents":793,"canonicalTag":1402,"publishedDate":764,"_editable":1403},{"_uid":15,"title":785,"plugin":17,"og_image":18,"og_title":18,"description":786,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"What Happens if I Default on a Loan? | Navient Marketplace","Defaulting on a loan can have serious consequences. Learn how to avoid defaulting and what steps to take if it happens.",[788],{"id":18,"_uid":23,"image":789,"intro":786,"classes":18,"_editable":790,"blogTitle":777,"component":26,"imageLink":791,"blendImage":28,"backgroundColor":29},"//a.storyblok.com/f/110029/5184x3456/fefcc7e4b3/what-happens-if-i-default-on-a-loan.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798159\"}-->","/images/what-happens-if-i-default-on-a-loan.png","Finance 101",[794],{"_uid":35,"color":36,"richText":795,"_editable":1401,"component":762},{"type":38,"content":796},[797,805,812,819,827,843,850,857,864,885,893,900,910,917,938,946,953,961,982,990,1020,1041,1049,1056,1064,1071,1158,1166,1173,1302,1310,1317,1344,1352,1367,1377,1392],{"type":41,"content":798},[799],{"text":44,"type":45,"marks":800},[801,803],{"type":48,"attrs":802},{"class":50},{"type":52,"attrs":804},{"color":54},{"type":41,"content":806},[807],{"text":808,"type":45,"marks":809},"When you take out a loan, you intend to be able to pay it back. However, sometimes unexpected financial situations can make it challenging to make your payments. ",[810],{"type":52,"attrs":811},{"color":54},{"type":41,"content":813},[814],{"text":815,"type":45,"marks":816},"Defaulting on a loan happens when you miss your monthly payments for a specific amount of time. Once your loan is in default, you can experience consequences, including damage to your credit score, collection efforts, legal actions, and possibly losing assets secured by the loan. ",[817],{"type":52,"attrs":818},{"color":54},{"type":90,"attrs":820,"content":821},{"level":92},[822],{"text":823,"type":45,"marks":824},"What Happens When I Start Missing Payments?",[825],{"type":52,"attrs":826},{"color":54},{"type":41,"content":828},[829,838],{"text":830,"type":45,"marks":831},"Delinquency",[832,835,837],{"type":66,"attrs":833},{"href":834,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.studentloanborrowerassistance.org/what-is-the-difference-between-default-and-delinquency/",{"type":52,"attrs":836},{"color":74},{"type":76},{"text":839,"type":45,"marks":840}," is the first step towards defaulting on your loan. If you miss a single loan payment or make a late payment, you will be delinquent on your loan. ",[841],{"type":52,"attrs":842},{"color":54},{"type":41,"content":844},[845],{"text":846,"type":45,"marks":847},"At this stage, your loan payment is past due. Lenders typically have a grace period that allows late payments without severe consequences. However, you may experience late fees. ",[848],{"type":52,"attrs":849},{"color":54},{"type":41,"content":851},[852],{"text":853,"type":45,"marks":854},"Delinquency can lead to default, but it’s important to note that it is a temporary and reversible situation. You can recover from delinquency by making your missed payment(s) and getting back on track with your loan obligation. ",[855],{"type":52,"attrs":856},{"color":54},{"type":41,"content":858},[859],{"text":860,"type":45,"marks":861},"If you become delinquent on your loan or struggle to make payments, immediately contact your lender. Communicating and taking proactive steps can help stop delinquency from escalating into default. ",[862],{"type":52,"attrs":863},{"color":54},{"type":41,"content":865},[866,871,880],{"text":867,"type":45,"marks":868},"When you miss consecutive payments for a specific period of time as specified in your loan agreement, you ",[869],{"type":52,"attrs":870},{"color":54},{"text":872,"type":45,"marks":873},"default on your loans",[874,877,879],{"type":66,"attrs":875},{"href":876,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://studentaid.gov/manage-loans/default",{"type":52,"attrs":878},{"color":74},{"type":76},{"text":881,"type":45,"marks":882},". Default is the next step after delinquency and represents a more severe failure to make payments and pay back your loan. It can result in negative consequences, including legal action. ",[883],{"type":52,"attrs":884},{"color":54},{"type":90,"attrs":886,"content":887},{"level":92},[888],{"text":889,"type":45,"marks":890},"What Does it Mean to Default on a Loan?",[891],{"type":52,"attrs":892},{"color":54},{"type":41,"content":894},[895],{"text":896,"type":45,"marks":897},"Defaulting on your loan will have different consequences and courses of action based on the type of loan. Different loan types have different time periods for default. Remember that the exact time period will differ depending on your lender and loan agreement.",[898],{"type":52,"attrs":899},{"color":54},{"type":90,"attrs":901,"content":903},{"level":902},3,[904],{"text":905,"type":45,"marks":906},"Credit Cards ",[907],{"type":52,"attrs":908},{"color":909},"rgb(67, 67, 67)",{"type":41,"content":911},[912],{"text":913,"type":45,"marks":914},"Credit cards will usually default after several months of delinquency. Exact timelines for default may vary, so check with your lender. Expected consequences include increased interest rates and penalty fees. ",[915],{"type":52,"attrs":916},{"color":54},{"type":41,"content":918},[919,924,933],{"text":920,"type":45,"marks":921},"If your credit card defaults, you could experience aggressive collection efforts from your lender or a debt collection agency. Your lender could also pursue legal action to recover the outstanding debt and possibly secure ",[922],{"type":52,"attrs":923},{"color":54},{"text":925,"type":45,"marks":926},"wage garnishment",[927,930,932],{"type":66,"attrs":928},{"href":929,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.dol.gov/agencies/whd/fact-sheets/30-cppa",{"type":52,"attrs":931},{"color":74},{"type":76},{"text":934,"type":45,"marks":935},". ",[936],{"type":52,"attrs":937},{"color":54},{"type":90,"attrs":939,"content":940},{"level":902},[941],{"text":942,"type":45,"marks":943},"Personal Loans",[944],{"type":52,"attrs":945},{"color":909},{"type":41,"content":947},[948],{"text":949,"type":45,"marks":950},"Personal loans will default at different times depending on your lender and loan agreement. Typically, it will be after several weeks or months, but check with your lender for the exact timeline.  Depending on the loan type, personal loans could result in wage garnishment or seizure of your collateral asset if you have a secured loan. ",[951],{"type":52,"attrs":952},{"color":54},{"type":90,"attrs":954,"content":955},{"level":902},[956],{"text":957,"type":45,"marks":958},"Mortgage",[959],{"type":52,"attrs":960},{"color":909},{"type":41,"content":962},[963,968,977],{"text":964,"type":45,"marks":965},"The time period for defaulting on a mortgage will ",[966],{"type":52,"attrs":967},{"color":54},{"text":969,"type":45,"marks":970},"vary by the lender and state",[971,974,976],{"type":66,"attrs":972},{"href":973,"uuid":69,"anchor":69,"target":70,"linktype":71},"http://www.foreclosurelaw.org/",{"type":52,"attrs":975},{"color":74},{"type":76},{"text":978,"type":45,"marks":979},". For many borrowers, defaulting on a mortgage will lead to foreclosure. If you struggle to make your mortgage payments, consider refinancing your mortgage. ",[980],{"type":52,"attrs":981},{"color":54},{"type":90,"attrs":983,"content":984},{"level":902},[985],{"text":986,"type":45,"marks":987},"Student Loans",[988],{"type":52,"attrs":989},{"color":909},{"type":41,"content":991},[992,1001,1006,1015],{"text":993,"type":45,"marks":994},"Student loans",[995,998,1000],{"type":66,"attrs":996},{"href":997,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://navirefi.com/",{"type":52,"attrs":999},{"color":74},{"type":76},{"text":1002,"type":45,"marks":1003}," will typically default after ",[1004],{"type":52,"attrs":1005},{"color":54},{"text":1007,"type":45,"marks":1008},"270 days",[1009,1011,1012,1014],{"type":66,"attrs":1010},{"href":876,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":98},{"type":52,"attrs":1013},{"color":74},{"type":76},{"text":1016,"type":45,"marks":1017},". This type of loan has a long delinquency period, allowing you more time to sort out your financial situation. ",[1018],{"type":52,"attrs":1019},{"color":54},{"type":41,"content":1021},[1022,1027,1036],{"text":1023,"type":45,"marks":1024},"The first consequence of student loan default can be ",[1025],{"type":52,"attrs":1026},{"color":54},{"text":1028,"type":45,"marks":1029},"acceleration",[1030,1033,1035],{"type":66,"attrs":1031},{"href":1032,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://studentaid.gov/help-center/answers/article/what-is-acceleration",{"type":52,"attrs":1034},{"color":74},{"type":76},{"text":1037,"type":45,"marks":1038},", meaning your outstanding balance is due immediately. The federal government can also withhold federal benefits and tax refunds until you repay your debt. Defaulting on student loans can also result in wage garnishment. ",[1039],{"type":52,"attrs":1040},{"color":54},{"type":90,"attrs":1042,"content":1043},{"level":902},[1044],{"text":1045,"type":45,"marks":1046},"Auto Loans",[1047],{"type":52,"attrs":1048},{"color":909},{"type":41,"content":1050},[1051],{"text":1052,"type":45,"marks":1053},"Auto loans will typically default after several weeks or months. For an exact timeline, check with your lender. If you default on your auto loan, your lender may repossess your vehicle. If your car is repossessed, you may still owe your lender due to your vehicle depreciating. ",[1054],{"type":52,"attrs":1055},{"color":54},{"type":90,"attrs":1057,"content":1058},{"level":902},[1059],{"text":1060,"type":45,"marks":1061},"Consequences",[1062],{"type":52,"attrs":1063},{"color":909},{"type":41,"content":1065},[1066],{"text":1067,"type":45,"marks":1068},"Regardless of the type of loan you are defaulting on, certain consequences may apply in every situation: ",[1069],{"type":52,"attrs":1070},{"color":54},{"type":507,"content":1072},[1073,1088,1103,1128,1143],{"type":139,"content":1074},[1075],{"type":41,"content":1076},[1077,1083],{"text":1078,"type":45,"marks":1079},"Damage to your credit score:",[1080,1081],{"type":98},{"type":52,"attrs":1082},{"color":54},{"text":1084,"type":45,"marks":1085}," default will be reported to the credit bureaus, causing your credit score to fall. A low credit score may make qualifying for future credit and favorable terms difficult. ",[1086],{"type":52,"attrs":1087},{"color":54},{"type":139,"content":1089},[1090],{"type":41,"content":1091},[1092,1098],{"text":1093,"type":45,"marks":1094},"Increased interest rates and fees: ",[1095,1096],{"type":98},{"type":52,"attrs":1097},{"color":54},{"text":1099,"type":45,"marks":1100},"late fees will add to your debt balance, and you could experience increased interest rates when you default. Increased rates and added fees will make it even harder to pay off. ",[1101],{"type":52,"attrs":1102},{"color":54},{"type":139,"content":1104},[1105],{"type":41,"content":1106},[1107,1113,1123],{"text":1108,"type":45,"marks":1109},"A default will stay on your credit report for ",[1110,1111],{"type":98},{"type":52,"attrs":1112},{"color":54},{"text":1114,"type":45,"marks":1115},"seven years",[1116,1119,1120,1122],{"type":66,"attrs":1117},{"href":1118,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/ask-cfpb/how-long-does-negative-information-remain-on-my-credit-report-en-323/",{"type":98},{"type":52,"attrs":1121},{"color":74},{"type":76},{"text":1124,"type":45,"marks":1125},": your credit score can improve over time, but the default will stay on your report for seven years.",[1126],{"type":52,"attrs":1127},{"color":54},{"type":139,"content":1129},[1130],{"type":41,"content":1131},[1132,1138],{"text":1133,"type":45,"marks":1134},"You may have to work with a collection agency: ",[1135,1136],{"type":98},{"type":52,"attrs":1137},{"color":54},{"text":1139,"type":45,"marks":1140},"lenders may involve collection agencies to recover the outstanding debt. They may frequently contact you until you pay off your debt. ",[1141],{"type":52,"attrs":1142},{"color":54},{"type":139,"content":1144},[1145],{"type":41,"content":1146},[1147,1153],{"text":1148,"type":45,"marks":1149},"Potential legal action: ",[1150,1151],{"type":98},{"type":52,"attrs":1152},{"color":54},{"text":1154,"type":45,"marks":1155},"legal action can result in wage garnishment or seizure of your collateral asset, depending on loan type. ",[1156],{"type":52,"attrs":1157},{"color":54},{"type":90,"attrs":1159,"content":1160},{"level":92},[1161],{"text":1162,"type":45,"marks":1163},"How to Avoid Going Into Default",[1164],{"type":52,"attrs":1165},{"color":54},{"type":41,"content":1167},[1168],{"text":1169,"type":45,"marks":1170},"If your loan is not already in default, you can take steps to avoid it. Since default has some significant consequences, try your best to prevent it. Here are some options that may work for you based on your financial situation and loan type: ",[1171],{"type":52,"attrs":1172},{"color":54},{"type":134,"attrs":1174,"content":1175},{"order":136},[1176,1192,1236,1287],{"type":139,"content":1177},[1178,1191],{"type":41,"content":1179},[1180,1186],{"text":1181,"type":45,"marks":1182},"Deferment or Forbearance: ",[1183,1184],{"type":98},{"type":52,"attrs":1185},{"color":54},{"text":1187,"type":45,"marks":1188},"One option to avoid default is seeking deferment or forbearance. Both are ways to provide temporary relief from your payments and require specific eligibility criteria and approval from your lender. Contact your lender to learn if this may be an option for you. ",[1189],{"type":52,"attrs":1190},{"color":54},{"type":41},{"type":139,"content":1193},[1194,1235],{"type":41,"content":1195},[1196,1202,1207,1216,1221,1230],{"text":1197,"type":45,"marks":1198},"Repayment Plans (For Federal Student Loans): ",[1199,1200],{"type":98},{"type":52,"attrs":1201},{"color":54},{"text":1203,"type":45,"marks":1204},"Changing your ",[1205],{"type":52,"attrs":1206},{"color":54},{"text":1208,"type":45,"marks":1209},"payment plan",[1210,1213,1215],{"type":66,"attrs":1211},{"href":1212,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://studentaid.gov/manage-loans/repayment/plans",{"type":52,"attrs":1214},{"color":74},{"type":76},{"text":1217,"type":45,"marks":1218}," may be a viable option for federal student loans to make your payments more manageable. ",[1219],{"type":52,"attrs":1220},{"color":54},{"text":1222,"type":45,"marks":1223},"Income-driven repayment plans",[1224,1227,1229],{"type":66,"attrs":1225},{"href":1226,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://studentaid.gov/manage-loans/repayment/plans/income-driven",{"type":52,"attrs":1228},{"color":74},{"type":76},{"text":1231,"type":45,"marks":1232}," base your monthly payments on your income and family size. An income-driven repayment plan may be a good option if your current payments are not affordable for your income. ",[1233],{"type":52,"attrs":1234},{"color":54},{"type":41},{"type":139,"content":1237},[1238,1286],{"type":41,"content":1239},[1240,1246,1251,1259,1267,1272,1281],{"text":1241,"type":45,"marks":1242},"Refinance or Consolidate (For Student Loans): ",[1243,1244],{"type":98},{"type":52,"attrs":1245},{"color":54},{"text":1247,"type":45,"marks":1248},"For private student loans, ",[1249],{"type":52,"attrs":1250},{"color":54},{"text":1252,"type":45,"marks":1253},"refinancing",[1254,1256,1258],{"type":66,"attrs":1255},{"href":997,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":1257},{"color":74},{"type":76},{"text":1260,"type":45,"marks":1261},"1",[1262,1265],{"type":48,"attrs":1263},{"class":1264},"superscript",{"type":52,"attrs":1266},{"color":54},{"text":1268,"type":45,"marks":1269}," can lower your monthly payments. For federal student loans, consider ",[1270],{"type":52,"attrs":1271},{"color":54},{"text":1273,"type":45,"marks":1274},"consolidating",[1275,1278,1280],{"type":66,"attrs":1276},{"href":1277,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://studentaid.gov/manage-loans/consolidation",{"type":52,"attrs":1279},{"color":74},{"type":76},{"text":1282,"type":45,"marks":1283},". Although this may result in paying more in interest over the life of your loan, it may help make your monthly payments more manageable. ",[1284],{"type":52,"attrs":1285},{"color":54},{"type":41},{"type":139,"content":1288},[1289],{"type":41,"content":1290},[1291,1297],{"text":1292,"type":45,"marks":1293},"Contact Your Lender: ",[1294,1295],{"type":98},{"type":52,"attrs":1296},{"color":54},{"text":1298,"type":45,"marks":1299},"Options to avoid default will vary depending on your lender and loan type. If you struggle to make payments, do not hesitate to contact your lender. Explain your financial situation and work with your lender to come up with a solution. ",[1300],{"type":52,"attrs":1301},{"color":54},{"type":90,"attrs":1303,"content":1304},{"level":92},[1305],{"text":1306,"type":45,"marks":1307},"What To Do if You’re in Default",[1308],{"type":52,"attrs":1309},{"color":54},{"type":41,"content":1311},[1312],{"text":1313,"type":45,"marks":1314},"If you’re in default, contact your lender as soon as possible. Do not avoid communications from your lender or collection agencies. ",[1315],{"type":52,"attrs":1316},{"color":54},{"type":41,"content":1318},[1319,1324,1332,1339],{"text":1320,"type":45,"marks":1321},"There are options out there if you’re struggling to make payments. ",[1322],{"type":52,"attrs":1323},{"color":54},{"text":1325,"type":45,"marks":1326},"Apply for a debt consolidation loan",[1327,1329,1331],{"type":66,"attrs":1328},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":1330},{"color":74},{"type":76},{"text":1333,"type":45,"marks":1334},"2",[1335,1337],{"type":48,"attrs":1336},{"class":1264},{"type":52,"attrs":1338},{"color":54},{"text":1340,"type":45,"marks":1341}," or balance transfer credit card today. ",[1342],{"type":52,"attrs":1343},{"color":54},{"type":41,"content":1345},[1346],{"text":755,"type":45,"marks":1347},[1348,1350],{"type":48,"attrs":1349},{"class":50},{"type":52,"attrs":1351},{"color":54},{"type":41,"content":1353},[1354,1360],{"text":1260,"type":45,"marks":1355},[1356,1358],{"type":48,"attrs":1357},{"class":1264},{"type":52,"attrs":1359},{"color":54},{"text":1361,"type":45,"marks":1362}," You may lose benefits associated with your underlying federal and/or private loans if you refinance such as federal Income-driven Repayment Plans, Economic Hardship Deferment, Public Service Loan Forgiveness, or other deferment and forbearance options. If you file for bankruptcy, you may still be required to pay back this loan.",[1363,1365],{"type":48,"attrs":1364},{"class":50},{"type":52,"attrs":1366},{"color":54},{"type":41,"content":1368},[1369],{"text":1370,"type":45,"marks":1371},"Choosing to refinance to a longer term may lower your monthly payment, but increase the amount of interest you may pay. Choosing to refinance to a shorter term may increase your monthly payment, but lower the amount of interest you may pay. Review your loan documentation for total cost of your refinanced loan.",[1372,1374],{"type":48,"attrs":1373},{"class":50},{"type":52,"attrs":1375},{"color":1376},"rgb(75, 75, 75)",{"type":41,"content":1378},[1379,1385],{"text":1333,"type":45,"marks":1380},[1381,1383],{"type":48,"attrs":1382},{"class":1264},{"type":52,"attrs":1384},{"color":1376},{"text":1386,"type":45,"marks":1387}," Navient customers are invited to consider personal loan offers through our partner MoneyLion. Navient has not shared your information with MoneyLion and is not involved in the personal loan application process in any manner. All information is submitted directly to MoneyLion and any personal loan offers are made directly by participants in MoneyLion’s lending platform. Engine by MoneyLion is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. ",[1388,1390],{"type":48,"attrs":1389},{"class":50},{"type":52,"attrs":1391},{"color":1376},{"type":41,"content":1393},[1394],{"text":1395,"type":45,"marks":1396},"Loan proceeds may not be used for postsecondary educational expenses, including refinancing federal or private student loans.",[1397,1399],{"type":48,"attrs":1398},{"class":50},{"type":52,"attrs":1400},{"color":1376},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798159\"}-->","https://www.marketplace.navient.com/blog/what-happens-if-i-default-on-a-loan/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798159\"}-->","what-happens-if-i-default-on-a-loan","navient_marketplace/blog/what-happens-if-i-default-on-a-loan",[],"12cbfbb6-ff53-41b2-a115-28376f0c7d55","2023-09-26T16:17:34.857Z","blog/what-happens-if-i-default-on-a-loan",[],{"name":1412,"created_at":1413,"published_at":1414,"updated_at":1415,"id":1416,"uuid":1417,"content":1418,"slug":2206,"full_slug":2207,"sort_by_date":69,"position":768,"tag_list":2208,"is_startpage":28,"parent_id":770,"meta_data":69,"group_id":2209,"first_published_at":2210,"release_id":69,"lang":773,"path":2211,"alternates":2212,"default_full_slug":69,"translated_slugs":69},"Which debt should I pay off first?","2025-04-07T18:30:19.642Z","2026-04-01T16:45:08.862Z","2026-04-01T16:45:08.886Z",651798158,"a89244e6-c8ca-49cd-ad15-5b25234ef178",{"seo":1419,"_uid":20,"hero":1422,"author":30,"category":792,"featured":28,"imageAlt":18,"component":32,"blogContents":1428,"canonicalTag":2204,"publishedDate":764,"_editable":2205},{"_uid":15,"title":1420,"plugin":17,"og_image":18,"og_title":18,"description":1421,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Which debt should I pay off first? | Navient Marketplace","Pay off higher-interest debt first to save the most money over time. But if that sounds like too big of a challenge, try these other methods.",[1423],{"id":18,"_uid":23,"image":1424,"intro":1421,"classes":18,"_editable":1425,"blogTitle":1426,"component":26,"imageLink":1427,"blendImage":28,"backgroundColor":29},"//a.storyblok.com/f/110029/1280x853/6fb22bafe2/which-debt-should-i-pay-off-first.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798158\"}-->","Which Debt Should I Pay Off First?","/images/which-debt-should-i-pay-off-first.png",[1429],{"_uid":35,"color":36,"richText":1430,"_editable":2203,"component":762},{"type":38,"content":1431},[1432,1441,1451,1474,1494,1503,1525,1533,1542,1564,1572,1581,1590,1599,1608,1625,1655,1663,1671,1679,1688,1697,1706,1715,1736,1744,1752,1895,1903,1912,1921,1930,1939,1961,1969,1977,2139,2148,2169,2178,2194],{"type":41,"attrs":1433,"content":1434},{"textAlign":69},[1435],{"text":44,"type":45,"marks":1436},[1437,1439],{"type":52,"attrs":1438},{"color":54},{"type":48,"attrs":1440},{"class":50},{"type":41,"attrs":1442,"content":1443},{"textAlign":69},[1444],{"text":1445,"type":45,"marks":1446},"Navient is not a debt consulting company. This is for personal finance education only. If you have questions about how to pay off your debt, please consult with a professional debt management company. ",[1447,1449],{"type":52,"attrs":1448},{"color":54},{"type":48,"attrs":1450},{"class":50},{"type":41,"attrs":1452,"content":1453},{"textAlign":69},[1454,1459,1468],{"text":1455,"type":45,"marks":1456},"If you have multiple sources of debt, it can take time to figure out which debt you should pay off first. Remember that you are not alone in your debt management efforts. In 2022, ",[1457],{"type":52,"attrs":1458},{"color":54},{"text":1460,"type":45,"marks":1461},"the average debt for Americans was $95,067",[1462,1465,1467],{"type":66,"attrs":1463},{"href":1464,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.experian.com/blogs/ask-experian/research/consumer-debt-study/",{"type":52,"attrs":1466},{"color":74},{"type":76},{"text":1469,"type":45,"marks":1470}," across all debt types. ",[1471],{"type":52,"attrs":1472},{"color":1473},"rgb(51, 51, 51)",{"type":41,"attrs":1475,"content":1476},{"textAlign":69},[1477,1482,1489],{"text":1478,"type":45,"marks":1479},"Whether you have debt from a mortgage, student loans, credit cards, or other debt types, there are methods to paying off your debt that can make it easier. The best plan for you is the one you can stick with. However, the first step for ",[1480],{"type":52,"attrs":1481},{"color":54},{"text":1483,"type":45,"marks":1484},"everyone",[1485,1487],{"type":52,"attrs":1486},{"color":54},{"type":1488},"italic",{"text":1490,"type":45,"marks":1491}," is paying off any tax debt or delinquent accounts before trying out these strategies. ",[1492],{"type":52,"attrs":1493},{"color":54},{"type":90,"attrs":1495,"content":1496},{"level":92,"textAlign":69},[1497],{"text":1498,"type":45,"marks":1499},"Pay Off Tax Debt First",[1500,1502],{"type":52,"attrs":1501},{"color":54},{"type":98},{"type":41,"attrs":1504,"content":1505},{"textAlign":69},[1506,1511,1520],{"text":1507,"type":45,"marks":1508},"If you owe any tax debt, you need to pay this debt off first. Tax debt is the result of not paying the tax balance of your federal income taxes by the due date, typically April 15. Going too long without paying could result in ",[1509],{"type":52,"attrs":1510},{"color":54},{"text":1512,"type":45,"marks":1513},"high interest, penalties, and fees",[1514,1517,1519],{"type":66,"attrs":1515},{"href":1516,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.irs.gov/newsroom/if-youve-filed-but-havent-paid#:~:text=The%20failure%2Dto%2Dpay%20penalty,the%20total%20amount%20you%20owe.",{"type":52,"attrs":1518},{"color":74},{"type":76},{"text":1521,"type":45,"marks":1522},". Leaving this debt unpaid will be extremely difficult to get out from under. ",[1523],{"type":52,"attrs":1524},{"color":54},{"type":41,"attrs":1526,"content":1527},{"textAlign":69},[1528],{"text":1529,"type":45,"marks":1530},"Once you pay off your tax debt, you can start paying off your remaining debt. ",[1531],{"type":52,"attrs":1532},{"color":54},{"type":90,"attrs":1534,"content":1535},{"level":92,"textAlign":69},[1536],{"text":1537,"type":45,"marks":1538},"Pay Delinquent Accounts First",[1539,1541],{"type":52,"attrs":1540},{"color":54},{"type":98},{"type":41,"attrs":1543,"content":1544},{"textAlign":69},[1545,1550,1559],{"text":1546,"type":45,"marks":1547},"Another essential step before paying off your remaining debt is to take care of any ",[1548],{"type":52,"attrs":1549},{"color":54},{"text":1551,"type":45,"marks":1552},"delinquent accounts",[1553,1556,1558],{"type":66,"attrs":1554},{"href":1555,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.investopedia.com/terms/d/delinquent.asp#:~:text=In%20finance%2C%20it%20commonly%20refers,generally%20considered%20to%20be%20delinquent.",{"type":52,"attrs":1557},{"color":74},{"type":76},{"text":1560,"type":45,"marks":1561},". Delinquent accounts are payments or debts that are past due. Having delinquent accounts can have consequences, including late fees and damage to your credit score. It can also make it difficult to secure future credit, such as a mortgage or auto loan. ",[1562],{"type":52,"attrs":1563},{"color":54},{"type":41,"attrs":1565,"content":1566},{"textAlign":69},[1567],{"text":1568,"type":45,"marks":1569},"Once you’ve handled any delinquent accounts, it’s time to start paying off any remaining debt. ",[1570],{"type":52,"attrs":1571},{"color":54},{"type":90,"attrs":1573,"content":1574},{"level":92,"textAlign":69},[1575],{"text":1576,"type":45,"marks":1577},"Pay Off Highest-Interest Debt First (Avalanche Method)",[1578,1580],{"type":52,"attrs":1579},{"color":54},{"type":98},{"type":41,"attrs":1582,"content":1583},{"textAlign":69},[1584],{"text":1585,"type":45,"marks":1586},"Best for: individuals who can stay motivated",[1587,1589],{"type":52,"attrs":1588},{"color":54},{"type":1488},{"type":41,"attrs":1591,"content":1592},{"textAlign":69},[1593],{"text":1594,"type":45,"marks":1595},"Pros: save money on interest ",[1596,1598],{"type":52,"attrs":1597},{"color":54},{"type":1488},{"type":41,"attrs":1600,"content":1601},{"textAlign":69},[1602],{"text":1603,"type":45,"marks":1604},"Cons: can take a while to feel like you are making progress",[1605,1607],{"type":52,"attrs":1606},{"color":54},{"type":1488},{"type":41,"attrs":1609,"content":1610},{"textAlign":69},[1611,1620],{"text":1612,"type":45,"marks":1613},"The debt avalanche method",[1614,1617,1619],{"type":66,"attrs":1615},{"href":1616,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/about-us/blog/how-reduce-your-debt/",{"type":52,"attrs":1618},{"color":74},{"type":76},{"text":1621,"type":45,"marks":1622}," is the most commonly recommended option for paying off debt. Using this method, you’ll save the most on interest by paying off debts with high-interest rates. ",[1623],{"type":52,"attrs":1624},{"color":54},{"type":41,"attrs":1626,"content":1627},{"textAlign":69},[1628,1633,1639,1649],{"text":1629,"type":45,"marks":1630},"This method focuses on paying off the debt with the highest interest rate first. To follow the avalanche method, make your minimum monthly payments on all accounts, but dedicate any extra money to the highest-interest debt. ",[1631],{"type":52,"attrs":1632},{"color":54},{"text":1634,"type":45,"marks":1635},"As a general tip, when you have additional funds to pay ahead, ",[1636,1638],{"type":52,"attrs":1637},{"color":54},{"type":98},{"text":1640,"type":45,"marks":1641},"pay toward the principal",[1642,1645,1647,1648],{"type":66,"attrs":1643},{"href":1644,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-paying-interest-and-paying-off-my-principal-in-an-auto-loan-en-845/",{"type":52,"attrs":1646},{"color":74},{"type":98},{"type":76},{"text":1650,"type":45,"marks":1651}," instead of the loan balance. ",[1652,1654],{"type":52,"attrs":1653},{"color":54},{"type":98},{"type":41,"attrs":1656,"content":1657},{"textAlign":69},[1658],{"text":1659,"type":45,"marks":1660},"Once you pay off your highest-interest debt, prioritize paying off the debt with the next highest-interest rate. Continue this process until you are debt free. Like an avalanche, this method starts slowly and then gains momentum. You’ll have more funds for the remaining debts as you pay off the highest-interest debts. Saving money on interest will help you make larger payments on your remaining debt and reduce the total interest you will pay. ",[1661],{"type":52,"attrs":1662},{"color":54},{"type":41,"attrs":1664,"content":1665},{"textAlign":69},[1666],{"text":1667,"type":45,"marks":1668},"The avalanche method may be suitable if you can stick to making regular payments for years or even decades. It may also work for you if your highest-interest debts are of a relatively low balance. Low balances will make it easier for you to gain momentum using this method. ",[1669],{"type":52,"attrs":1670},{"color":54},{"type":41,"attrs":1672,"content":1673},{"textAlign":69},[1674],{"text":1675,"type":45,"marks":1676},"While there are benefits to this method, it can be demotivating to get started since the highest-interest debt will also be the most challenging to pay off. It may not work for you if your highest-interest debt also has a high balance. ",[1677],{"type":52,"attrs":1678},{"color":54},{"type":90,"attrs":1680,"content":1681},{"level":92,"textAlign":69},[1682],{"text":1683,"type":45,"marks":1684},"Pay Off Smallest Balance Debt First (Snowball Method)",[1685,1687],{"type":52,"attrs":1686},{"color":54},{"type":98},{"type":41,"attrs":1689,"content":1690},{"textAlign":69},[1691],{"text":1692,"type":45,"marks":1693},"Best for: individuals who want to see progress quickly",[1694,1696],{"type":52,"attrs":1695},{"color":54},{"type":1488},{"type":41,"attrs":1698,"content":1699},{"textAlign":69},[1700],{"text":1701,"type":45,"marks":1702},"Pros: easy to make progress",[1703,1705],{"type":52,"attrs":1704},{"color":54},{"type":1488},{"type":41,"attrs":1707,"content":1708},{"textAlign":69},[1709],{"text":1710,"type":45,"marks":1711},"Cons: will likely cost more than the avalanche method overall",[1712,1714],{"type":52,"attrs":1713},{"color":54},{"type":1488},{"type":41,"attrs":1716,"content":1717},{"textAlign":69},[1718,1723,1731],{"text":1719,"type":45,"marks":1720},"Another method to pay off your debt is ",[1721],{"type":52,"attrs":1722},{"color":54},{"text":1724,"type":45,"marks":1725},"the snowball method",[1726,1728,1730],{"type":66,"attrs":1727},{"href":1616,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":1729},{"color":74},{"type":76},{"text":1732,"type":45,"marks":1733},". This method pays off your lowest balances first, regardless of interest rates. ",[1734],{"type":52,"attrs":1735},{"color":54},{"type":41,"attrs":1737,"content":1738},{"textAlign":69},[1739],{"text":1740,"type":45,"marks":1741},"This method may be excellent for you if you need help staying motivated or want to feel like you are making progress on your debt quickly. You will likely be able to pay off your first debt in a matter of months or a year. The snowball method keeps your momentum, motivating you to pay down your remaining debt balances. ",[1742],{"type":52,"attrs":1743},{"color":54},{"type":41,"attrs":1745,"content":1746},{"textAlign":69},[1747],{"text":1748,"type":45,"marks":1749},"Follow the snowball method with these easy steps: ",[1750],{"type":52,"attrs":1751},{"color":54},{"type":134,"attrs":1753,"content":1755},{"order":1754},{"order":136},[1756,1804,1820,1836,1863,1879],{"type":139,"content":1757},[1758,1772],{"type":41,"attrs":1759,"content":1760},{"textAlign":69},[1761,1767],{"text":1762,"type":45,"marks":1763},"Make a list of all your debt balances",[1764,1766],{"type":52,"attrs":1765},{"color":54},{"type":98},{"text":1768,"type":45,"marks":1769}," to identify the smallest. For example, let’s consider the following debts: ",[1770],{"type":52,"attrs":1771},{"color":54},{"type":507,"content":1773},[1774,1784,1794],{"type":139,"content":1775},[1776],{"type":41,"attrs":1777,"content":1778},{"textAlign":69},[1779],{"text":1780,"type":45,"marks":1781},"Credit Card A: $1,000 balance",[1782],{"type":52,"attrs":1783},{"color":54},{"type":139,"content":1785},[1786],{"type":41,"attrs":1787,"content":1788},{"textAlign":69},[1789],{"text":1790,"type":45,"marks":1791},"Credit Card B: $7,500 balance",[1792],{"type":52,"attrs":1793},{"color":54},{"type":139,"content":1795},[1796],{"type":41,"attrs":1797,"content":1798},{"textAlign":69},[1799],{"text":1800,"type":45,"marks":1801},"Personal Loan: $15,000 balance",[1802],{"type":52,"attrs":1803},{"color":54},{"type":139,"content":1805},[1806],{"type":41,"attrs":1807,"content":1808},{"textAlign":69},[1809,1815],{"text":1810,"type":45,"marks":1811},"Pay the minimum payments on all debts except for your smallest balance.",[1812,1814],{"type":52,"attrs":1813},{"color":54},{"type":98},{"text":1816,"type":45,"marks":1817}," For this example, you would make the minimum payments on Credit Card B and your Personal Loan. ",[1818],{"type":52,"attrs":1819},{"color":54},{"type":139,"content":1821},[1822],{"type":41,"attrs":1823,"content":1824},{"textAlign":69},[1825,1831],{"text":1826,"type":45,"marks":1827},"Put any extra money toward your smallest debt balance. ",[1828,1830],{"type":52,"attrs":1829},{"color":54},{"type":98},{"text":1832,"type":45,"marks":1833},"In this example, any extra money would go towards paying off Credit Card A. ",[1834],{"type":52,"attrs":1835},{"color":54},{"type":139,"content":1837},[1838],{"type":41,"attrs":1839,"content":1840},{"textAlign":69},[1841,1847,1852,1858],{"text":1842,"type":45,"marks":1843},"Snowball effect: ",[1844,1846],{"type":52,"attrs":1845},{"color":54},{"type":98},{"text":1848,"type":45,"marks":1849},"once you pay off your smallest balance, move on to the next smallest.",[1850],{"type":52,"attrs":1851},{"color":54},{"text":1853,"type":45,"marks":1854}," ",[1855,1857],{"type":52,"attrs":1856},{"color":54},{"type":98},{"text":1859,"type":45,"marks":1860},"Using the example, once you pay off Credit Card A, make extra payments toward Credit Card B. ",[1861],{"type":52,"attrs":1862},{"color":54},{"type":139,"content":1864},[1865],{"type":41,"attrs":1866,"content":1867},{"textAlign":69},[1868,1874],{"text":1869,"type":45,"marks":1870},"Repeat as necessary. ",[1871,1873],{"type":52,"attrs":1872},{"color":54},{"type":98},{"text":1875,"type":45,"marks":1876},"Continue making extra payments on your next smallest balance until you are debt-free. ",[1877],{"type":52,"attrs":1878},{"color":54},{"type":139,"content":1880},[1881],{"type":41,"attrs":1882,"content":1883},{"textAlign":69},[1884,1890],{"text":1885,"type":45,"marks":1886},"Debt-free: ",[1887,1889],{"type":52,"attrs":1888},{"color":54},{"type":98},{"text":1891,"type":45,"marks":1892},"celebrate reaching your financial goals! ",[1893],{"type":52,"attrs":1894},{"color":54},{"type":41,"attrs":1896,"content":1897},{"textAlign":69},[1898],{"text":1899,"type":45,"marks":1900},"Compared to the avalanche method, this method will cost more overall and take longer. You will also accrue more interest. However, it may be worth it, as paying off your debt will feel more achievable. ",[1901],{"type":52,"attrs":1902},{"color":54},{"type":90,"attrs":1904,"content":1905},{"level":92,"textAlign":69},[1906],{"text":1907,"type":45,"marks":1908},"Consolidate Your Debt",[1909,1911],{"type":52,"attrs":1910},{"color":54},{"type":98},{"type":41,"attrs":1913,"content":1914},{"textAlign":69},[1915],{"text":1916,"type":45,"marks":1917},"Best for: individuals who have multiple high-interest debts",[1918,1920],{"type":52,"attrs":1919},{"color":54},{"type":1488},{"type":41,"attrs":1922,"content":1923},{"textAlign":69},[1924],{"text":1925,"type":45,"marks":1926},"Pros: simplifies payment",[1927,1929],{"type":52,"attrs":1928},{"color":54},{"type":1488},{"type":41,"attrs":1931,"content":1932},{"textAlign":69},[1933],{"text":1934,"type":45,"marks":1935},"Cons: may extend your repayment period; may accumulate more debt ",[1936,1938],{"type":52,"attrs":1937},{"color":54},{"type":1488},{"type":41,"attrs":1940,"content":1941},{"textAlign":69},[1942,1947,1956],{"text":1943,"type":45,"marks":1944},"Consider ",[1945],{"type":52,"attrs":1946},{"color":54},{"text":1948,"type":45,"marks":1949},"consolidating your debt ",[1950,1953,1955],{"type":66,"attrs":1951},{"href":1952,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://offers.moneylion.com/channelTrackingOfferRedirect/ba675b58-5d95-47ac-b285-7ddd8df4eaf3/f8b6569c-b09c-41c4-818f-6ac8ffa83f8e",{"type":52,"attrs":1954},{"color":74},{"type":76},{"text":1957,"type":45,"marks":1958},"to simplify your payments and potentially lower your interest rates. However, you should only consolidate if you are sure you can continue making payments. ",[1959],{"type":52,"attrs":1960},{"color":54},{"type":41,"attrs":1962,"content":1963},{"textAlign":69},[1964],{"text":1965,"type":45,"marks":1966},"Taking a break from payments can be tempting once your balance is transferred, but you should continue making payments. Delaying will only keep you in debt longer. ",[1967],{"type":52,"attrs":1968},{"color":54},{"type":41,"attrs":1970,"content":1971},{"textAlign":69},[1972],{"text":1973,"type":45,"marks":1974},"Here are some options to consolidate your debt: ",[1975],{"type":52,"attrs":1976},{"color":54},{"type":134,"attrs":1978,"content":1979},{"order":136},[1980,2054,2105],{"type":139,"content":1981},[1982,2025],{"type":41,"attrs":1983,"content":1984},{"textAlign":69},[1985,1991,1996,2006,2011,2020],{"text":1986,"type":45,"marks":1987},"Debt consolidation loan: ",[1988,1990],{"type":52,"attrs":1989},{"color":909},{"type":98},{"text":1992,"type":45,"marks":1993},"One option to consolidate your debt is a ",[1994],{"type":52,"attrs":1995},{"color":54},{"text":1997,"type":45,"marks":1998},"personal loan",[1999,2003,2005],{"type":66,"attrs":2000},{"href":2001,"uuid":69,"anchor":69,"target":2002,"linktype":71},"https://www.earnest.com/personal-loans?utm_medium=organic&utm_source=navient_marketplace&utm_campaign=PL_rc_pro_genpop_20260331 ","_self",{"type":52,"attrs":2004},{"color":74},{"type":76},{"text":2007,"type":45,"marks":2008},". You can use the personal loan to pay off your debts and then make monthly loan payments instead of several different payments. ",[2009],{"type":52,"attrs":2010},{"color":54},{"text":2012,"type":45,"marks":2013},"Consolidating your debt with a personal loan",[2014,2017,2019],{"type":66,"attrs":2015},{"href":2016,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/personal-loan-to-pay-off-credit-card/",{"type":52,"attrs":2018},{"color":74},{"type":76},{"text":2021,"type":45,"marks":2022}," can potentially lower your interest rate, especially if you have high-interest debt. Lowering the interest rate on your debt will reduce your overall payments and the amount of interest paid. Paying off your debts with a personal loan may have other benefits, such as boosting your credit score. Managing a single debt may demonstrate financial responsibility to credit bureaus, possibly improving your creditworthiness. While there are benefits to debt consolidation with a personal loan, consider the drawbacks as well. Lenders may not approve a personal loan if your credit score is low. You also may not receive interest rates lower than your current interest rates. There are also costs associated with personal loans, such as origination fees. Consider all fees to understand the total cost of your personal loan.  ",[2023],{"type":52,"attrs":2024},{"color":54},{"type":41,"attrs":2026,"content":2027},{"textAlign":69},[2028,2036,2046],{"text":2029,"type":45,"marks":2030},"Apply for a personal loan",[2031,2033,2035],{"type":66,"attrs":2032},{"href":2001,"uuid":69,"anchor":69,"target":2002,"linktype":71},{"type":52,"attrs":2034},{"color":74},{"type":76},{"text":1260,"type":45,"marks":2037},[2038,2040,2042,2044,2045],{"type":66,"attrs":2039},{"href":2001,"uuid":69,"anchor":69,"target":2002,"linktype":71},{"type":52,"attrs":2041},{"color":74},{"type":48,"attrs":2043},{"class":1264},{"type":1264},{"type":76},{"text":2047,"type":45,"marks":2048}," >>",[2049,2051,2053],{"type":66,"attrs":2050},{"href":2001,"uuid":69,"anchor":69,"target":2002,"linktype":71},{"type":52,"attrs":2052},{"color":74},{"type":76},{"type":139,"content":2055},[2056,2103],{"type":41,"attrs":2057,"content":2058},{"textAlign":69},[2059,2065,2070,2075,2084,2089,2098],{"text":2060,"type":45,"marks":2061},"Balance transfer credit card:",[2062,2064],{"type":52,"attrs":2063},{"color":909},{"type":98},{"text":2066,"type":45,"marks":2067}," ",[2068],{"type":52,"attrs":2069},{"color":909},{"text":2071,"type":45,"marks":2072},"Another option is to consolidate your debt with a ",[2073],{"type":52,"attrs":2074},{"color":54},{"text":2076,"type":45,"marks":2077},"balance transfer credit card",[2078,2081,2083],{"type":66,"attrs":2079},{"href":2080,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/consumer-tools/credit-cards/answers/key-terms/#balance-transfer",{"type":52,"attrs":2082},{"color":74},{"type":76},{"text":2085,"type":45,"marks":2086},". This option is only for existing credit card debt, not other debt types like a mortgage or student loans. A benefit to consolidating your credit card debt with a balance transfer card is that many offer 0% APR for the first 12 months. Introductory offers typically allow you to make payments without paying interest for your first year. Balance transfer cards will also simplify your payments if you have multiple credit card debts. However, consider any ",[2087],{"type":52,"attrs":2088},{"color":54},{"text":2090,"type":45,"marks":2091},"balance transfer fees",[2092,2095,2097],{"type":66,"attrs":2093},{"href":2094,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-balance-transfer-fee-can-a-balance-transfer-fee-be-charged-on-a-zero-percent-interest-rate-offer-en-53/",{"type":52,"attrs":2096},{"color":74},{"type":76},{"text":2099,"type":45,"marks":2100}," before getting a balance transfer card. Usually, the fee will be a percentage of the amount transferred. Additional costs can impact the cost-effectiveness of consolidating your credit card debt, so factor this into your decision. It may be challenging to qualify for a balance transfer card with a low credit score or a history of late payments. Consolidating your credit card debt with a balance transfer card may be a good option if you can take advantage of the introductory offer and have a good credit score. ",[2101],{"type":52,"attrs":2102},{"color":54},{"type":41,"attrs":2104},{"textAlign":69},{"type":139,"content":2106},[2107],{"type":41,"attrs":2108,"content":2109},{"textAlign":69},[2110,2116,2120,2125,2134],{"text":2111,"type":45,"marks":2112},"Take out a HELOC:",[2113,2115],{"type":52,"attrs":2114},{"color":909},{"type":98},{"text":2066,"type":45,"marks":2117},[2118],{"type":52,"attrs":2119},{"color":909},{"text":2121,"type":45,"marks":2122},"Another option is to take out a ",[2123],{"type":52,"attrs":2124},{"color":54},{"text":2126,"type":45,"marks":2127},"home equity line of credit",[2128,2131,2133],{"type":66,"attrs":2129},{"href":2130,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://consumer.ftc.gov/articles/home-equity-loans-and-home-equity-lines-credit",{"type":52,"attrs":2132},{"color":74},{"type":76},{"text":2135,"type":45,"marks":2136},". This option may work for you if you’re a homeowner with equity. Typically, a certain amount of equity is required to qualify for a HELOC, usually around 20%. A HELOC allows you to borrow money against the equity in your home. With A HELOC, you can draw money multiple times up to the maximum HELOC amount. The benefits of consolidating your debt with a HELOC include lower interest rates, simplified payments, and flexibility. Home equity lines of credit can have lower interest rates than credit cards and other unsecured types of debt. They are also flexible and allow you to draw funds as needed. However, the biggest drawback is the risk to your homeownership. A HELOC is secured by your home, meaning you risk foreclosure if you miss payments. Consider your ability to make payments and the potential risk before taking out a HELOC. ",[2137],{"type":52,"attrs":2138},{"color":54},{"type":90,"attrs":2140,"content":2141},{"level":92,"textAlign":69},[2142],{"text":2143,"type":45,"marks":2144},"The Best Way to Pay Off Your Debt is to Pick a Plan You’ll Stick With",[2145,2147],{"type":52,"attrs":2146},{"color":54},{"type":98},{"type":41,"attrs":2149,"content":2150},{"textAlign":69},[2151,2156,2164],{"text":2152,"type":45,"marks":2153},"Remember that the best method to pay off your debt is the one you can commit to. Don’t feel like you have to use a particular approach if you don’t believe it will be sustainable for you in the long run. If you want to consolidate your debt, ",[2154],{"type":52,"attrs":2155},{"color":54},{"text":2157,"type":45,"marks":2158},"Navient Marketplace has customized financial solutions",[2159,2161,2163],{"type":66,"attrs":2160},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":2162},{"color":74},{"type":76},{"text":2165,"type":45,"marks":2166}," that can help you become debt-free. ",[2167],{"type":52,"attrs":2168},{"color":54},{"type":41,"attrs":2170,"content":2171},{"textAlign":69},[2172],{"text":755,"type":45,"marks":2173},[2174,2176],{"type":52,"attrs":2175},{"color":54},{"type":48,"attrs":2177},{"class":50},{"type":41,"attrs":2179,"content":2180},{"textAlign":69},[2181,2187],{"text":1260,"type":45,"marks":2182},[2183,2185],{"type":52,"attrs":2184},{"color":54},{"type":48,"attrs":2186},{"class":1264},{"text":2188,"type":45,"marks":2189},"Navient customers are invited to consider personal loan offers through our partner Fiona. Navient has not shared your information with Fiona and is not involved in the personal loan application process in any manner. All information is submitted directly to Fiona and any personal loan offers are made directly by participants in Fiona’s lending platform, powered by Even Financial. Even Financial, Inc. is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. ",[2190,2192],{"type":52,"attrs":2191},{"color":54},{"type":48,"attrs":2193},{"class":50},{"type":41,"attrs":2195,"content":2196},{"textAlign":69},[2197],{"text":1395,"type":45,"marks":2198},[2199,2201],{"type":52,"attrs":2200},{"color":54},{"type":48,"attrs":2202},{"class":50},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798158\"}-->","https://www.marketplace.navient.com/blog/which-debt-should-i-pay-off-first/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798158\"}-->","which-debt-should-i-pay-off-first","navient_marketplace/blog/which-debt-should-i-pay-off-first",[],"1a81a2d0-664d-4cbb-8826-0829c0be4314","2023-09-26T16:17:56.227Z","blog/which-debt-should-i-pay-off-first/",[],{"name":2214,"created_at":2215,"published_at":2216,"updated_at":2217,"id":2218,"uuid":2219,"content":2220,"slug":2809,"full_slug":2810,"sort_by_date":69,"position":768,"tag_list":2811,"is_startpage":28,"parent_id":770,"meta_data":69,"group_id":2812,"first_published_at":2813,"release_id":69,"lang":773,"path":2814,"alternates":2815,"default_full_slug":69,"translated_slugs":69},"How to Budget When You’re Broke","2025-04-07T18:30:18.017Z","2025-12-26T13:44:59.861Z","2025-12-26T13:44:59.926Z",651798157,"16b94920-acf2-431d-ab1b-facc6bbdf1ec",{"seo":2221,"_uid":20,"hero":2224,"author":30,"category":792,"featured":28,"imageAlt":18,"component":32,"blogContents":2229,"canonicalTag":2807,"publishedDate":764,"_editable":2808},{"_uid":15,"title":2222,"plugin":17,"og_image":18,"og_title":18,"description":2223,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"How to Budget When You’re Broke | Navient Marketplace","It’s always smart to have a budget, especially when you’re tight on money. Read our guide to take your budgeting skills to the next level.",[2225],{"id":18,"_uid":23,"image":2226,"intro":2223,"classes":18,"_editable":2227,"blogTitle":2214,"component":26,"imageLink":2228,"blendImage":28,"backgroundColor":29},"//a.storyblok.com/f/110029/4471x3357/5586b5fc94/how-to-budget-when-youre-broke.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798157\"}-->","/images/how-to-budget-when-youre-broke.png",[2230],{"_uid":35,"color":36,"richText":2231,"_editable":2806,"component":762},{"type":38,"content":2232},[2233,2241,2262,2271,2278,2287,2294,2315,2322,2343,2352,2373,2381,2389,2397,2405,2412,2461,2477,2485,2493,2501,2509,2529,2536,2543,2550,2558,2566,2574,2582,2597,2604,2611,2619,2627,2635,2643,2658,2665,2672,2681,2688,2695,2716,2725,2732,2739,2748,2755,2762,2771,2778,2798],{"type":41,"content":2234},[2235],{"text":44,"type":45,"marks":2236},[2237,2239],{"type":48,"attrs":2238},{"class":50},{"type":52,"attrs":2240},{"color":54},{"type":41,"content":2242},[2243,2248,2257],{"text":2244,"type":45,"marks":2245},"One of the best ways to take control of your finances is to ",[2246],{"type":52,"attrs":2247},{"color":54},{"text":2249,"type":45,"marks":2250},"make and stick to a personal budget",[2251,2254,2256],{"type":66,"attrs":2252},{"href":2253,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://consumer.gov/managing-your-money/making-budget#what-it-is",{"type":52,"attrs":2255},{"color":74},{"type":76},{"text":2258,"type":45,"marks":2259},". A budget is a monthly plan for your spending that takes into account your needs and wants. It can help you set spending limits, stay or become debt-free, and save for your future. ",[2260],{"type":52,"attrs":2261},{"color":54},{"type":90,"attrs":2263,"content":2264},{"level":92},[2265],{"text":2266,"type":45,"marks":2267},"Key Tips for Budgeting",[2268,2269],{"type":98},{"type":52,"attrs":2270},{"color":54},{"type":41,"content":2272},[2273],{"text":2274,"type":45,"marks":2275},"Budgeting doesn’t have to be overly complicated. Here are some key budgeting tips to help you while creating and following your monthly budget: ",[2276],{"type":52,"attrs":2277},{"color":54},{"type":90,"attrs":2279,"content":2280},{"level":92},[2281],{"text":2282,"type":45,"marks":2283},"Understand your monthly income and spending habits",[2284,2285],{"type":98},{"type":52,"attrs":2286},{"color":54},{"type":41,"content":2288},[2289],{"text":2290,"type":45,"marks":2291},"Before planning your budget, calculate your monthly income and expenses. Your monthly income is your net pay or ‘take-home pay.’ It is what you earn after your taxes are taken out. This includes earnings from your job and any other side hustles. ",[2292],{"type":52,"attrs":2293},{"color":54},{"type":41,"content":2295},[2296,2301,2310],{"text":2297,"type":45,"marks":2298},"To help calculate an accurate monthly income, use an ",[2299],{"type":52,"attrs":2300},{"color":54},{"text":2302,"type":45,"marks":2303},"income and benefits tracker",[2304,2307,2309],{"type":66,"attrs":2305},{"href":2306,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_income_benefits_tool_2018-11_ADA.pdf",{"type":52,"attrs":2308},{"color":74},{"type":76},{"text":2311,"type":45,"marks":2312},". If your income fluctuates month to month, you can take the average of what you make in a year and divide by 12. ",[2313],{"type":52,"attrs":2314},{"color":54},{"type":41,"content":2316},[2317],{"text":2318,"type":45,"marks":2319},"Once you have calculated your monthly income, take a look at your monthly expenses. Your monthly expenses are everything you spend money on in a month.",[2320],{"type":52,"attrs":2321},{"color":54},{"type":41,"content":2323},[2324,2329,2338],{"text":2325,"type":45,"marks":2326},"To calculate your monthly expenses, take a look at your bank statements to see what you have spent your money on. Alternatively, you could track your spending daily and keep your receipts to add it all up at the end of the month. Use a ",[2327],{"type":52,"attrs":2328},{"color":54},{"text":2330,"type":45,"marks":2331},"spending tracker",[2332,2335,2337],{"type":66,"attrs":2333},{"href":2334,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_well-being_spending-tracker.pdf",{"type":52,"attrs":2336},{"color":74},{"type":76},{"text":2339,"type":45,"marks":2340}," to make adding up your expenses easier. ",[2341],{"type":52,"attrs":2342},{"color":54},{"type":90,"attrs":2344,"content":2345},{"level":92},[2346],{"text":2347,"type":45,"marks":2348},"Choose a budgeting method",[2349,2350],{"type":98},{"type":52,"attrs":2351},{"color":54},{"type":41,"content":2353},[2354,2359,2368],{"text":2355,"type":45,"marks":2356},"Once you know your monthly income and spending habits, you can ",[2357],{"type":52,"attrs":2358},{"color":54},{"text":2360,"type":45,"marks":2361},"start making your budget",[2362,2365,2367],{"type":66,"attrs":2363},{"href":2364,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/about-us/blog/budgeting-how-to-create-a-budget-and-stick-with-it/",{"type":52,"attrs":2366},{"color":74},{"type":76},{"text":2369,"type":45,"marks":2370},". There are many different methods of budgeting to choose from. The right budgeting method for you will depend on your goals and current financial situation. Here are some common budgeting methods: ",[2371],{"type":52,"attrs":2372},{"color":54},{"type":90,"attrs":2374,"content":2375},{"level":902},[2376],{"text":2377,"type":45,"marks":2378},"50/30/20 Budgeting",[2379],{"type":52,"attrs":2380},{"color":909},{"type":41,"content":2382},[2383],{"text":2384,"type":45,"marks":2385},"Best for: budgeting beginners ",[2386,2387],{"type":1488},{"type":52,"attrs":2388},{"color":54},{"type":41,"content":2390},[2391],{"text":2392,"type":45,"marks":2393},"Pros: easy to implement; can be adjusted as needed",[2394,2395],{"type":1488},{"type":52,"attrs":2396},{"color":54},{"type":41,"content":2398},[2399],{"text":2400,"type":45,"marks":2401},"Cons: may not work for those with more debt or large savings goals ",[2402,2403],{"type":1488},{"type":52,"attrs":2404},{"color":54},{"type":41,"content":2406},[2407],{"text":2408,"type":45,"marks":2409},"This method breaks down your spending into three categories:",[2410],{"type":52,"attrs":2411},{"color":54},{"type":134,"attrs":2413,"content":2415},{"order":2414},{"order":136},[2416,2431,2446],{"type":139,"content":2417},[2418],{"type":41,"content":2419},[2420,2426],{"text":2421,"type":45,"marks":2422},"Needs (50%): ",[2423,2424],{"type":98},{"type":52,"attrs":2425},{"color":54},{"text":2427,"type":45,"marks":2428},"Necessary expenses such as your rent, utilities, car payment, and medical bills.",[2429],{"type":52,"attrs":2430},{"color":54},{"type":139,"content":2432},[2433],{"type":41,"content":2434},[2435,2441],{"text":2436,"type":45,"marks":2437},"Wants (30%): ",[2438,2439],{"type":98},{"type":52,"attrs":2440},{"color":54},{"text":2442,"type":45,"marks":2443},"Discretionary spending including dining out and entertainment. ",[2444],{"type":52,"attrs":2445},{"color":54},{"type":139,"content":2447},[2448],{"type":41,"content":2449},[2450,2456],{"text":2451,"type":45,"marks":2452},"Savings and Debt payments (20%): ",[2453,2454],{"type":98},{"type":52,"attrs":2455},{"color":54},{"text":2457,"type":45,"marks":2458},"Money put towards paying off debt such as your student loans or saving for future goals. ",[2459],{"type":52,"attrs":2460},{"color":54},{"type":41,"content":2462},[2463,2472],{"text":2464,"type":45,"marks":2465},"The 50/30/20",[2466,2469,2471],{"type":66,"attrs":2467},{"href":2468,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://srfs.upenn.edu/financial-wellness/browse-topics/budgeting/popular-budgeting-strategies",{"type":52,"attrs":2470},{"color":74},{"type":76},{"text":2473,"type":45,"marks":2474}," budgeting method is easy for budgeting beginners. If you are looking for a simple budgeting method to implement, this may work for you! However, this method may not work for individuals with higher debt obligations and those that are looking to save more.  ",[2475],{"type":52,"attrs":2476},{"color":54},{"type":90,"attrs":2478,"content":2479},{"level":902},[2480],{"text":2481,"type":45,"marks":2482},"Zero-Based Budgeting",[2483],{"type":52,"attrs":2484},{"color":909},{"type":41,"content":2486},[2487],{"text":2488,"type":45,"marks":2489},"Best for: taking full control of your spending",[2490,2491],{"type":1488},{"type":52,"attrs":2492},{"color":54},{"type":41,"content":2494},[2495],{"text":2496,"type":45,"marks":2497},"Pros: accounts for every single dollar of your income",[2498,2499],{"type":1488},{"type":52,"attrs":2500},{"color":54},{"type":41,"content":2502},[2503],{"text":2504,"type":45,"marks":2505},"Cons: intensive and requires precise planning – to the dollar",[2506,2507],{"type":1488},{"type":52,"attrs":2508},{"color":54},{"type":41,"content":2510},[2511,2516,2524],{"text":2512,"type":45,"marks":2513},"With ",[2514],{"type":52,"attrs":2515},{"color":54},{"text":2517,"type":45,"marks":2518},"zero-based budgeting",[2519,2521,2523],{"type":66,"attrs":2520},{"href":2468,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":2522},{"color":74},{"type":76},{"text":2525,"type":45,"marks":2526},", every dollar of your income is put to use. With this budgeting method, your income minus your expenses should equal zero. Zero-based budgeting would be best for individuals with a consistent monthly income.",[2527],{"type":52,"attrs":2528},{"color":54},{"type":41,"content":2530},[2531],{"text":2532,"type":45,"marks":2533},"Zero-based budgeting is not the same as living paycheck to paycheck. It means that every dollar of your income is spent thoughtfully and put towards your financial needs, like savings, entertainment, or paying off debt. ",[2534],{"type":52,"attrs":2535},{"color":54},{"type":41,"content":2537},[2538],{"text":2539,"type":45,"marks":2540},"To create this type of budget, dedicate a certain amount of your income to every expense you will have that month (rent, utilities, dining out, entertainment, debt payments, savings etc.) until you have planned for every dollar of your income. It requires precise planning and a great understanding of your monthly income and expenditures. ",[2541],{"type":52,"attrs":2542},{"color":54},{"type":41,"content":2544},[2545],{"text":2546,"type":45,"marks":2547},"This method is more intensive as it requires you to track every single dollar. This may work for those who understand their spending habits and want full control of their spending. It may not be best for those who cannot predict exact expenses for the month or who are new to budgeting. ",[2548],{"type":52,"attrs":2549},{"color":54},{"type":90,"attrs":2551,"content":2552},{"level":902},[2553],{"text":2554,"type":45,"marks":2555},"Envelope Budgeting ",[2556],{"type":52,"attrs":2557},{"color":909},{"type":41,"content":2559},[2560],{"text":2561,"type":45,"marks":2562},"Best for: precise planning and individuals who like to pay with cash",[2563,2564],{"type":1488},{"type":52,"attrs":2565},{"color":54},{"type":41,"content":2567},[2568],{"text":2569,"type":45,"marks":2570},"Pros: tangible reminder of your budget",[2571,2572],{"type":1488},{"type":52,"attrs":2573},{"color":54},{"type":41,"content":2575},[2576],{"text":2577,"type":45,"marks":2578},"Cons: requires handling large amounts of cash",[2579,2580],{"type":1488},{"type":52,"attrs":2581},{"color":54},{"type":41,"content":2583},[2584,2592],{"text":2585,"type":45,"marks":2586},"Envelope budgeting",[2587,2589,2591],{"type":66,"attrs":2588},{"href":2468,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":2590},{"color":74},{"type":76},{"text":2593,"type":45,"marks":2594}," is similar to zero-based budgeting, but done entirely with cash. Once you decide how much of your income will go to each spending category, get envelopes for each. Label the envelopes for the appropriate category (groceries, utilities, gas, etc.). ",[2595],{"type":52,"attrs":2596},{"color":54},{"type":41,"content":2598},[2599],{"text":2600,"type":45,"marks":2601},"Once you have used all of the money in the envelope for that category, you cannot spend any more in that category until the next month. In case of emergency, you can take money from another envelope. However, if it becomes a habit, that is a sign you are not budgeting effectively. ",[2602],{"type":52,"attrs":2603},{"color":54},{"type":41,"content":2605},[2606],{"text":2607,"type":45,"marks":2608},"This method may work for those that like to have a tangible reminder of their budget. It can also be effective at preventing overspending in each category. Envelope budgeting may not be right for you if you do not feel comfortable holding onto cash or prefer digital transactions. ",[2609],{"type":52,"attrs":2610},{"color":54},{"type":90,"attrs":2612,"content":2613},{"level":902},[2614],{"text":2615,"type":45,"marks":2616},"Pay-Yourself-First Budgeting",[2617],{"type":52,"attrs":2618},{"color":909},{"type":41,"content":2620},[2621],{"text":2622,"type":45,"marks":2623},"Best for: paying off your debts and contributing to your savings",[2624,2625],{"type":1488},{"type":52,"attrs":2626},{"color":54},{"type":41,"content":2628},[2629],{"text":2630,"type":45,"marks":2631},"Pros: leaves room to spend your discretionary money however you like",[2632,2633],{"type":1488},{"type":52,"attrs":2634},{"color":54},{"type":41,"content":2636},[2637],{"text":2638,"type":45,"marks":2639},"Cons: does not consider how you could save money on a day-to-day basis",[2640,2641],{"type":1488},{"type":52,"attrs":2642},{"color":54},{"type":41,"content":2644},[2645,2653],{"text":2646,"type":45,"marks":2647},"Pay-yourself-first budgeting",[2648,2650,2652],{"type":66,"attrs":2649},{"href":2468,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":2651},{"color":74},{"type":76},{"text":2654,"type":45,"marks":2655}," is simple yet effective, and focuses mostly on debt repayment and savings. ",[2656],{"type":52,"attrs":2657},{"color":54},{"type":41,"content":2659},[2660],{"text":2661,"type":45,"marks":2662},"Simply budget for how much you would like to save or put towards your debt. After you have saved the allotted amount, you can spend your money however you like. Of course, it is still important to prioritize necessary expenses. ",[2663],{"type":52,"attrs":2664},{"color":54},{"type":41,"content":2666},[2667],{"text":2668,"type":45,"marks":2669},"Pay-yourself-first budgeting may work for those that don’t like to budget every single expense, but still want to work towards saving. With this method, you are working towards your goals without having to worry about your discretionary spending. However, if you are looking to be more effective with your money in every category of spending, this may not be for you. ",[2670],{"type":52,"attrs":2671},{"color":54},{"type":90,"attrs":2673,"content":2674},{"level":92},[2675],{"text":2676,"type":45,"marks":2677},"Track your spending and progress",[2678,2679],{"type":98},{"type":52,"attrs":2680},{"color":54},{"type":41,"content":2682},[2683],{"text":2684,"type":45,"marks":2685},"Once you have chosen a budgeting method and implemented your budget, it is essential to keep track of your progress. Without holding yourself accountable to the budget you just worked so hard to create, you can get off track and miss your financial goals. ",[2686],{"type":52,"attrs":2687},{"color":54},{"type":41,"content":2689},[2690],{"text":2691,"type":45,"marks":2692},"Come up with ways to track your spending and progress. Take the time to review your bank account statements or receipts at the end of each week. Note when you are reaching an expense limit in your discretionary spending and see where you can cut back. ",[2693],{"type":52,"attrs":2694},{"color":54},{"type":41,"content":2696},[2697,2702,2711],{"text":2698,"type":45,"marks":2699},"If you like to keep up to date with your progress digitally, consider ",[2700],{"type":52,"attrs":2701},{"color":54},{"text":2703,"type":45,"marks":2704},"downloading a budgeting app",[2705,2708,2710],{"type":66,"attrs":2706},{"href":2707,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://mint.intuit.com/how-mint-works",{"type":52,"attrs":2709},{"color":74},{"type":76},{"text":2712,"type":45,"marks":2713},". Using a budgeting app or keeping a detailed spreadsheet may motivate you to stick to your budget and remind you of your goals. If you’d rather keep things on pen and paper, start a spending journal. ",[2714],{"type":52,"attrs":2715},{"color":54},{"type":90,"attrs":2717,"content":2718},{"level":92},[2719],{"text":2720,"type":45,"marks":2721},"Set goals and work towards them",[2722,2723],{"type":98},{"type":52,"attrs":2724},{"color":54},{"type":41,"content":2726},[2727],{"text":2728,"type":45,"marks":2729},"When you are budgeting, it can be easy to lose sight of why you are doing it. Following through with your plans can be overwhelming. The best way to stick with it is to set goals to help you remember why you are budgeting.  ",[2730],{"type":52,"attrs":2731},{"color":54},{"type":41,"content":2733},[2734],{"text":2735,"type":45,"marks":2736},"Whether you are trying to put away more money each month to pay off your student loans, or build up an emergency fund, your goals can motivate you. Remember that a strict budget doesn’t have to be forever and your budget will pay off and help achieve your goals. ",[2737],{"type":52,"attrs":2738},{"color":54},{"type":90,"attrs":2740,"content":2741},{"level":92},[2742],{"text":2743,"type":45,"marks":2744},"Update your budget when necessary",[2745,2746],{"type":98},{"type":52,"attrs":2747},{"color":54},{"type":41,"content":2749},[2750],{"text":2751,"type":45,"marks":2752},"As your financial situation changes, your budget should change as well. If you eventually achieve a higher monthly income, your budget should change to account for that. Similarly, if you encounter large unexpected expenses, you should adjust your budget to account for that as well. ",[2753],{"type":52,"attrs":2754},{"color":54},{"type":41,"content":2756},[2757],{"text":2758,"type":45,"marks":2759},"When you meet your savings goals or pay off your debt, you can adjust your budget to not include those expenses. This will leave extra money for spending on what you enjoy while retaining financial stability. After all, it’s time to enjoy the rewards of sticking with your budget! ",[2760],{"type":52,"attrs":2761},{"color":54},{"type":90,"attrs":2763,"content":2764},{"level":92},[2765],{"text":2766,"type":45,"marks":2767},"Why Should You Have a Budget?",[2768,2769],{"type":98},{"type":52,"attrs":2770},{"color":54},{"type":41,"content":2772},[2773],{"text":2774,"type":45,"marks":2775},"Budgeting will help you be more thoughtful with how you spend your money. It can also keep you from acquiring more debt by spending more than you have. Whether it’s your first time budgeting or you are budgeting pro, putting a budget together can help you achieve your financial goals. ",[2776],{"type":52,"attrs":2777},{"color":54},{"type":41,"content":2779},[2780,2785,2793],{"text":2781,"type":45,"marks":2782},"Looking to improve even more of your financial wellness? Visit ",[2783],{"type":52,"attrs":2784},{"color":54},{"text":2786,"type":45,"marks":2787},"Navient Marketplace",[2788,2790,2792],{"type":66,"attrs":2789},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":2791},{"color":74},{"type":76},{"text":2794,"type":45,"marks":2795}," for personalized banking and finance products. ",[2796],{"type":52,"attrs":2797},{"color":54},{"type":41,"content":2799},[2800],{"text":755,"type":45,"marks":2801},[2802,2804],{"type":48,"attrs":2803},{"class":50},{"type":52,"attrs":2805},{"color":54},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798157\"}-->","https://www.marketplace.navient.com/blog/how-to-budget-when-youre-broke/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798157\"}-->","how-to-budget-when-youre-broke","navient_marketplace/blog/how-to-budget-when-youre-broke",[],"382dbe21-a040-412a-8c21-561d1fe4c915","2023-09-26T16:18:38.954Z","blog/how-to-budget-when-youre-broke",[],{"name":2817,"created_at":2818,"published_at":2819,"updated_at":2820,"id":2821,"uuid":2822,"content":2823,"slug":3582,"full_slug":3583,"sort_by_date":69,"position":768,"tag_list":3584,"is_startpage":28,"parent_id":770,"meta_data":69,"group_id":3585,"first_published_at":2813,"release_id":69,"lang":773,"path":3586,"alternates":3587,"default_full_slug":69,"translated_slugs":69},"Can you get a HELOC on an Investment Property?","2025-04-07T18:30:16.392Z","2025-12-26T13:45:00.231Z","2025-12-26T13:45:00.300Z",651798156,"31fdca4f-48a2-44e2-b4fe-c5ee28b1c1a1",{"seo":2824,"_uid":20,"hero":2827,"author":2834,"category":942,"featured":28,"imageAlt":18,"component":32,"blogContents":2835,"canonicalTag":3580,"publishedDate":764,"_editable":3581},{"_uid":15,"title":2825,"plugin":17,"og_image":18,"og_title":18,"description":2826,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Can you get a HELOC on an Investment Property? | Navient Marketplace","It’s always smart to have a budget, especially when you’re tight It is possible to get a HELOC on investment property. However, qualifying for it can be more challenging than for a primary residence. Here’s what you need to know.on money. Read our guide to take your budgeting skills to the next level.",[2828],{"id":18,"_uid":23,"image":2829,"intro":2830,"classes":18,"_editable":2831,"blogTitle":2832,"component":26,"imageLink":2833,"blendImage":28,"backgroundColor":29},"//a.storyblok.com/f/110029/4000x2664/2da5f975d2/can-you-get-a-heloc-on-an-investment-property.png","It is possible to get a HELOC on investment property. However, qualifying for it can be more challenging than for a primary residence. Here’s what you need to know.","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798156\"}-->","Can You Get a HELOC on an Investment Property?","/images/can-you-get-a-heloc-on-an-investment-property.webp","natasha-khullar-relph",[2836],{"_uid":35,"color":36,"richText":2837,"_editable":3579,"component":762},{"type":38,"content":2838},[2839,2848,2855,2863,2870,3045,3053,3060,3068,3138,3146,3193,3201,3208,3216,3236,3243,3290,3297,3305,3312,3319,3357,3364,3372,3392,3413,3503,3510,3518,3539,3559,3565,3572],{"type":41,"content":2840},[2841],{"text":44,"type":45,"marks":2842},[2843,2845],{"type":48,"attrs":2844},{"class":50},{"type":52,"attrs":2846},{"color":2847},"#000000",{"type":41,"content":2849},[2850],{"text":2851,"type":45,"marks":2852},"A home equity line of credit (HELOC) is a popular way to leverage real estate assets to access cash. A HELOC is a revolving line of credit based on the equity you have in your property. You can use that credit to finance further investments, cover renovation costs, or even manage emergency expenses. However, while a HELOC can be a great funding resource in many situations, not all property owners qualify. So how do you know if you’re eligible? And can you get a HELOC on an investment property? Here’s what you need to know. ",[2853],{"type":52,"attrs":2854},{"color":2847},{"type":90,"attrs":2856,"content":2857},{"level":92},[2858],{"text":2859,"type":45,"marks":2860},"So, can you get a HELOC on investment property?",[2861],{"type":52,"attrs":2862},{"color":2847},{"type":41,"content":2864},[2865],{"text":2866,"type":45,"marks":2867},"The good news is that it is possible to get a HELOC on investment property. The bad news is that, while some banks and credit unions do offer HELOCs to real estate investors, not all do. Further, qualifying for a HELOC for an investment property can be more challenging than qualifying for a primary residence. This is due to several factors:",[2868],{"type":52,"attrs":2869},{"color":2847},{"type":507,"content":2871},[2872,2901,2916,2931,2946,2973,3015,3030],{"type":139,"content":2873},[2874],{"type":41,"content":2875},[2876,2882,2887,2896],{"text":2877,"type":45,"marks":2878},"Eligibility criteria: ",[2879,2880],{"type":98},{"type":52,"attrs":2881},{"color":2847},{"text":2883,"type":45,"marks":2884},"HELOCs for investment properties tend to have stringent eligibility criteria. They often require borrowers to have ",[2885],{"type":52,"attrs":2886},{"color":2847},{"text":2888,"type":45,"marks":2889},"high credit scores",[2890,2893,2895],{"type":66,"attrs":2891},{"href":2892,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-score-en-315/",{"type":52,"attrs":2894},{"color":2847},{"type":76},{"text":2897,"type":45,"marks":2898}," and good financial stability. In contrast, obtaining a HELOC for a primary residence is typically easier.",[2899],{"type":52,"attrs":2900},{"color":2847},{"type":139,"content":2902},[2903],{"type":41,"content":2904},[2905,2911],{"text":2906,"type":45,"marks":2907},"Equity: ",[2908,2909],{"type":98},{"type":52,"attrs":2910},{"color":2847},{"text":2912,"type":45,"marks":2913},"Lenders only offer HELOCs to borrowers who have enough equity in their investment properties — typically at least 20%. For a primary residence, on the other hand, you may only need 15% to qualify for a HELOC.",[2914],{"type":52,"attrs":2915},{"color":2847},{"type":139,"content":2917},[2918],{"type":41,"content":2919},[2920,2926],{"text":2921,"type":45,"marks":2922},"Interest rates:",[2923,2924],{"type":98},{"type":52,"attrs":2925},{"color":2847},{"text":2927,"type":45,"marks":2928}," Interest rates for investment property HELOCs are typically higher than those for primary residence HELOCs. This reflects the perceived risk that many lenders associate with investment properties.",[2929],{"type":52,"attrs":2930},{"color":2847},{"type":139,"content":2932},[2933],{"type":41,"content":2934},[2935,2941],{"text":2936,"type":45,"marks":2937},"Cash reserves: ",[2938,2939],{"type":98},{"type":52,"attrs":2940},{"color":2847},{"text":2942,"type":45,"marks":2943},"Many lenders also have stricter requirements for cash reserves when it comes to investment property HELOCs. They often expect borrowers to have an emergency fund equivalent to at least six months of property-related expenses. If you have rental property, you may also need to provide evidence of long-term tenants.",[2944],{"type":52,"attrs":2945},{"color":2847},{"type":139,"content":2947},[2948],{"type":41,"content":2949},[2950,2956,2961,2968],{"text":2951,"type":45,"marks":2952},"Debt-to-income (DTI) ratio: ",[2953,2954],{"type":98},{"type":52,"attrs":2955},{"color":2847},{"text":2957,"type":45,"marks":2958},"Your ",[2959],{"type":52,"attrs":2960},{"color":2847},{"text":263,"type":45,"marks":2962},[2963,2965,2967],{"type":66,"attrs":2964},{"href":267,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":2966},{"color":2847},{"type":76},{"text":2969,"type":45,"marks":2970}," will need to be between 40% and 50% to qualify for most investment property HELOCs. This ratio is often lower for primary residences.",[2971],{"type":52,"attrs":2972},{"color":2847},{"type":139,"content":2974},[2975],{"type":41,"content":2976},[2977,2983,2987,2996,3001,3010],{"text":2978,"type":45,"marks":2979},"Loan-to-value ratio:",[2980,2981],{"type":98},{"type":52,"attrs":2982},{"color":2847},{"text":1853,"type":45,"marks":2984},[2985],{"type":52,"attrs":2986},{"color":2847},{"text":2988,"type":45,"marks":2989},"The loan-to-value ratio",[2990,2993,2995],{"type":66,"attrs":2991},{"href":2992,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-to-value-ratio-and-how-does-it-relate-to-my-costs-en-121/",{"type":52,"attrs":2994},{"color":2847},{"type":76},{"text":2997,"type":45,"marks":2998},", or LTV ratio, is a financial metric used to assess the risk associated with a mortgage or loan. It represents the ratio of the loan amount to the appraised value of the property. With an investment property, you’ll need a ",[2999],{"type":52,"attrs":3000},{"color":2847},{"text":3002,"type":45,"marks":3003},"maximum LTV of 80%",[3004,3007,3009],{"type":66,"attrs":3005},{"href":3006,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://time.com/personal-finance/article/heloc-on-investment-property/",{"type":52,"attrs":3008},{"color":2847},{"type":76},{"text":3011,"type":45,"marks":3012},". For primary residences, the maximum LTV is typically closer to 90%.",[3013],{"type":52,"attrs":3014},{"color":2847},{"type":139,"content":3016},[3017],{"type":41,"content":3018},[3019,3025],{"text":3020,"type":45,"marks":3021},"Risk assessment and appraisals: ",[3022,3023],{"type":98},{"type":52,"attrs":3024},{"color":2847},{"text":3026,"type":45,"marks":3027},"When reviewing investment properties, lenders often conduct more thorough risk assessments and property appraisals. This can result in a longer application processing time than you might experience for a primary residence HELOC.",[3028],{"type":52,"attrs":3029},{"color":2847},{"type":139,"content":3031},[3032],{"type":41,"content":3033},[3034,3040],{"text":3035,"type":45,"marks":3036},"Credit score: ",[3037,3038],{"type":98},{"type":52,"attrs":3039},{"color":2847},{"text":3041,"type":45,"marks":3042},"When you apply for an investment property HELOC, your lender may require a credit score of 720 or higher. In contrast, for a primary home HELOC, a credit score of 620 or above is typically acceptable.",[3043],{"type":52,"attrs":3044},{"color":2847},{"type":90,"attrs":3046,"content":3047},{"level":92},[3048],{"text":3049,"type":45,"marks":3050},"The pros and cons of getting a HELOC on an investment property",[3051],{"type":52,"attrs":3052},{"color":2847},{"type":41,"content":3054},[3055],{"text":3056,"type":45,"marks":3057},"Using a HELOC on an investment property also comes with specific risks, such as variable interest rates and the potential for over-leveraging your equity. Here are a few things to think about before you apply for a HELOC.",[3058],{"type":52,"attrs":3059},{"color":2847},{"type":90,"attrs":3061,"content":3062},{"level":902},[3063],{"text":3064,"type":45,"marks":3065},"Pros",[3066],{"type":52,"attrs":3067},{"color":2847},{"type":507,"content":3069},[3070,3079,3088,3111,3120,3129],{"type":139,"content":3071},[3072],{"type":41,"content":3073},[3074],{"text":3075,"type":45,"marks":3076},"The interest rates on HELOCs are often lower compared to other forms of financing, such as home equity loans and other types of second mortgages. ",[3077],{"type":52,"attrs":3078},{"color":2847},{"type":139,"content":3080},[3081],{"type":41,"content":3082},[3083],{"text":3084,"type":45,"marks":3085},"It may be better to take out a HELOC on an investment property than on a primary residence since you won’t risk losing your home if you default on an investment property HELOC.",[3086],{"type":52,"attrs":3087},{"color":2847},{"type":139,"content":3089},[3090],{"type":41,"content":3091},[3092,3097,3106],{"text":3093,"type":45,"marks":3094},"During the ",[3095],{"type":52,"attrs":3096},{"color":2847},{"text":3098,"type":45,"marks":3099},"HELOC draw period",[3100,3103,3105],{"type":66,"attrs":3101},{"href":3102,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/ask-cfpb/my-lender-offered-me-a-home-equity-line-of-credit-heloc-what-is-a-heloc-en-107/",{"type":52,"attrs":3104},{"color":2847},{"type":76},{"text":3107,"type":45,"marks":3108},", you may be able to make interest-only payments rather than the larger minimum payments required for home equity loans. This may result in more manageable monthly bills.",[3109],{"type":52,"attrs":3110},{"color":2847},{"type":139,"content":3112},[3113],{"type":41,"content":3114},[3115],{"text":3116,"type":45,"marks":3117},"The interest you pay on your HELOC may be tax-deductible if the funds are used for qualified investment purposes. ",[3118],{"type":52,"attrs":3119},{"color":2847},{"type":139,"content":3121},[3122],{"type":41,"content":3123},[3124],{"text":3125,"type":45,"marks":3126},"You can use HELOC funds for property upgrades or renovations, potentially increasing the property’s value and your future rental income. ",[3127],{"type":52,"attrs":3128},{"color":2847},{"type":139,"content":3130},[3131],{"type":41,"content":3132},[3133],{"text":3134,"type":45,"marks":3135},"A HELOC can be a great way for new property owners to manage cash flow if your initial rental income doesn’t cover all your required expenses.",[3136],{"type":52,"attrs":3137},{"color":2847},{"type":90,"attrs":3139,"content":3140},{"level":902},[3141],{"text":3142,"type":45,"marks":3143},"Cons",[3144],{"type":52,"attrs":3145},{"color":2847},{"type":507,"content":3147},[3148,3157,3166,3175,3184],{"type":139,"content":3149},[3150],{"type":41,"content":3151},[3152],{"text":3153,"type":45,"marks":3154},"Not all lenders offer HELOCs on investment properties, and the limited availability can make it challenging to find suitable options. ",[3155],{"type":52,"attrs":3156},{"color":2847},{"type":139,"content":3158},[3159],{"type":41,"content":3160},[3161],{"text":3162,"type":45,"marks":3163},"You might pay higher interest rates than you would for a HELOC on a primary residence. ",[3164],{"type":52,"attrs":3165},{"color":2847},{"type":139,"content":3167},[3168],{"type":41,"content":3169},[3170],{"text":3171,"type":45,"marks":3172},"Most HELOCs come with annual fees as well as early cancellation or termination fees. ",[3173],{"type":52,"attrs":3174},{"color":2847},{"type":139,"content":3176},[3177],{"type":41,"content":3178},[3179],{"text":3180,"type":45,"marks":3181},"Tenant turnover, unexpected property maintenance expenses, and market dynamics could affect your ability to repay your HELOC, which could lead to increased financial stress. ",[3182],{"type":52,"attrs":3183},{"color":2847},{"type":139,"content":3185},[3186],{"type":41,"content":3187},[3188],{"text":3189,"type":45,"marks":3190},"Lenders may impose stricter eligibility criteria for investment property HELOCs. They may require you to have significant equity in the property, a high credit score, and a low loan-to-value ratio. That can make it more difficult to qualify.",[3191],{"type":52,"attrs":3192},{"color":2847},{"type":90,"attrs":3194,"content":3195},{"level":92},[3196],{"text":3197,"type":45,"marks":3198},"Alternatives to a HELOC on an investment property ",[3199],{"type":52,"attrs":3200},{"color":2847},{"type":41,"content":3202},[3203],{"text":3204,"type":45,"marks":3205},"If you decide not to pursue a HELOC for your investment property, consider these alternative loan options. ",[3206],{"type":52,"attrs":3207},{"color":2847},{"type":90,"attrs":3209,"content":3210},{"level":902},[3211],{"text":3212,"type":45,"marks":3213},"HELOC on your primary home",[3214],{"type":52,"attrs":3215},{"color":2847},{"type":41,"content":3217},[3218,3223,3231],{"text":3219,"type":45,"marks":3220},"Homebuyers in need of fast cash may want to consider a ",[3221],{"type":52,"attrs":3222},{"color":2847},{"text":3224,"type":45,"marks":3225},"primary home HELOC",[3226,3229],{"type":66,"attrs":3227},{"href":3228,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://offers.moneylion.com/channelTrackingOfferRedirect/bcd695cb-0506-4838-b6cd-dc453bc187ca/70a8fc69-658a-4a1e-a98f-cef4814d2db2",{"type":52,"attrs":3230},{"color":2847},{"text":3232,"type":45,"marks":3233}," instead of an investment property HELOC. Because lenders often view primary residences as less risky collateral than investment properties, HELOCs on primary residences usually come with lower interest rates. This can result in lower borrowing costs.",[3234],{"type":52,"attrs":3235},{"color":2847},{"type":41,"content":3237},[3238],{"text":3239,"type":45,"marks":3240},"Additional benefits include:",[3241],{"type":52,"attrs":3242},{"color":2847},{"type":507,"content":3244},[3245,3260,3275],{"type":139,"content":3246},[3247],{"type":41,"content":3248},[3249,3255],{"text":3250,"type":45,"marks":3251},"Higher equity position: ",[3252,3253],{"type":98},{"type":52,"attrs":3254},{"color":2847},{"text":3256,"type":45,"marks":3257},"Most borrowers have higher equity in their primary residences than on their investment properties. Maybe you made a substantial down payment, have years of mortgage payments under your belt, or have worked to increase your home’s value. This can result in a higher equity position and therefore a higher HELOC credit limit.",[3258],{"type":52,"attrs":3259},{"color":2847},{"type":139,"content":3261},[3262],{"type":41,"content":3263},[3264,3270],{"text":3265,"type":45,"marks":3266},"Easier qualification:",[3267,3268],{"type":98},{"type":52,"attrs":3269},{"color":2847},{"text":3271,"type":45,"marks":3272}," Lenders often demand fewer personal finance qualification requirements for primary residence HELOCs, which makes them easier to obtain.",[3273],{"type":52,"attrs":3274},{"color":2847},{"type":139,"content":3276},[3277],{"type":41,"content":3278},[3279,3285],{"text":3280,"type":45,"marks":3281},"Additional services: ",[3282,3283],{"type":98},{"type":52,"attrs":3284},{"color":2847},{"text":3286,"type":45,"marks":3287},"Some lenders may offer additional benefits or services to homeowners with primary residence HELOCs, such as financial planning assistance or existing-relationship discounts. ",[3288],{"type":52,"attrs":3289},{"color":2847},{"type":41,"content":3291},[3292],{"text":3293,"type":45,"marks":3294},"Remember that, while a primary residence HELOC offers some advantages, it also involves using your primary home as collateral. Similar to a primary home loan, you’ll risk foreclosure on your home if you fail to make your payments. So, before you sign up for a HELOC, carefully consider your ability to meet your repayment obligations. ",[3295],{"type":52,"attrs":3296},{"color":2847},{"type":90,"attrs":3298,"content":3299},{"level":902},[3300],{"text":3301,"type":45,"marks":3302},"Cash-out refinance ",[3303],{"type":52,"attrs":3304},{"color":2847},{"type":41,"content":3306},[3307],{"text":3308,"type":45,"marks":3309},"A cash-out refinance is a type of mortgage refinancing where you borrow more than what you currently owe on your mortgage and receive the difference in cash. Essentially, it allows you to tap into the equity you have built in your property and use it for other expenses or investments. The new mortgage loan replaces the old one and has a higher balance, reflecting the amount of cash you receive.",[3310],{"type":52,"attrs":3311},{"color":2847},{"type":41,"content":3313},[3314],{"text":3315,"type":45,"marks":3316},"Here's how it works in general:",[3317],{"type":52,"attrs":3318},{"color":2847},{"type":507,"content":3320},[3321,3330,3339,3348],{"type":139,"content":3322},[3323],{"type":41,"content":3324},[3325],{"text":3326,"type":45,"marks":3327},"You apply for a cash-out refinance with a lender of your choice.",[3328],{"type":52,"attrs":3329},{"color":2847},{"type":139,"content":3331},[3332],{"type":41,"content":3333},[3334],{"text":3335,"type":45,"marks":3336},"The lender evaluates your eligibility based on factors such as credit score, loan-to-value ratio, income, and debt-to-income ratio.",[3337],{"type":52,"attrs":3338},{"color":2847},{"type":139,"content":3340},[3341],{"type":41,"content":3342},[3343],{"text":3344,"type":45,"marks":3345},"If approved, you receive the cash difference between the new amount borrowed and your old mortgage balance.",[3346],{"type":52,"attrs":3347},{"color":2847},{"type":139,"content":3349},[3350],{"type":41,"content":3351},[3352],{"text":3353,"type":45,"marks":3354},"You can use the cash for various purposes such as home improvements, debt consolidation, education, or investments.",[3355],{"type":52,"attrs":3356},{"color":2847},{"type":41,"content":3358},[3359],{"text":3360,"type":45,"marks":3361},"It's important to note that a cash-out refinance typically comes with closing costs, which can range from 2% to 5% of the total loan amount. Additionally, it can lead to higher monthly loan payments and a longer repayment period than your original mortgage.",[3362],{"type":52,"attrs":3363},{"color":2847},{"type":90,"attrs":3365,"content":3366},{"level":902},[3367],{"text":3368,"type":45,"marks":3369},"Personal loan ",[3370],{"type":52,"attrs":3371},{"color":2847},{"type":41,"content":3373},[3374,3379,3387],{"text":3375,"type":45,"marks":3376},"An unsecured ",[3377],{"type":52,"attrs":3378},{"color":2847},{"text":1997,"type":45,"marks":3380},[3381,3384,3386],{"type":66,"attrs":3382},{"href":3383,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/what-is-a-personal-loan/",{"type":52,"attrs":3385},{"color":2847},{"type":76},{"text":3388,"type":45,"marks":3389}," is a type of loan that doesn't require any collateral. Secured loans (including HELOCs) are backed by assets like a house or car, which can be repossessed by the lender if the borrower defaults. Unsecured personal loans, on the other hand, are approved based on the borrower's creditworthiness and ability to repay the loan.",[3390],{"type":52,"attrs":3391},{"color":2847},{"type":41,"content":3393},[3394,3399,3408],{"text":3395,"type":45,"marks":3396},"Here are some ",[3397],{"type":52,"attrs":3398},{"color":2847},{"text":3400,"type":45,"marks":3401},"key points about unsecured personal loans",[3402,3405,3407],{"type":66,"attrs":3403},{"href":3404,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/pros-and-cons-of-personal-loans/",{"type":52,"attrs":3406},{"color":2847},{"type":76},{"text":3409,"type":45,"marks":3410},":",[3411],{"type":52,"attrs":3412},{"color":2847},{"type":507,"content":3414},[3415,3430,3445,3460,3488],{"type":139,"content":3416},[3417],{"type":41,"content":3418},[3419,3425],{"text":3420,"type":45,"marks":3421},"No collateral",[3422,3423],{"type":98},{"type":52,"attrs":3424},{"color":2847},{"text":3426,"type":45,"marks":3427},": Unsecured personal loans are not tied to any specific asset. This means that borrowers don't need to pledge their property or possessions as collateral.",[3428],{"type":52,"attrs":3429},{"color":2847},{"type":139,"content":3431},[3432],{"type":41,"content":3433},[3434,3440],{"text":3435,"type":45,"marks":3436},"Based on creditworthiness",[3437,3438],{"type":98},{"type":52,"attrs":3439},{"color":2847},{"text":3441,"type":45,"marks":3442},": Lenders evaluate the borrower's credit history, income, employment stability, and other factors to determine their creditworthiness and the terms of the loan, such as interest rate and loan amount.",[3443],{"type":52,"attrs":3444},{"color":2847},{"type":139,"content":3446},[3447],{"type":41,"content":3448},[3449,3455],{"text":3450,"type":45,"marks":3451},"Higher rates: ",[3452,3453],{"type":98},{"type":52,"attrs":3454},{"color":2847},{"text":3456,"type":45,"marks":3457},"Since unsecured personal loans are riskier for lenders than secured loans, they generally come with higher interest rates to compensate for the lack of collateral.",[3458],{"type":52,"attrs":3459},{"color":2847},{"type":139,"content":3461},[3462],{"type":41,"content":3463},[3464,3470,3475,3483],{"text":3465,"type":45,"marks":3466},"Flexible use of funds",[3467,3468],{"type":98},{"type":52,"attrs":3469},{"color":2847},{"text":3471,"type":45,"marks":3472},": Borrowers can typically use the funds from an unsecured personal loan for any purpose, including ",[3473],{"type":52,"attrs":3474},{"color":2847},{"text":3476,"type":45,"marks":3477},"consolidating debt",[3478,3480,3482],{"type":66,"attrs":3479},{"href":2016,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":3481},{"color":2847},{"type":76},{"text":3484,"type":45,"marks":3485},", financing home improvements, or covering medical expenses.",[3486],{"type":52,"attrs":3487},{"color":2847},{"type":139,"content":3489},[3490],{"type":41,"content":3491},[3492,3498],{"text":3493,"type":45,"marks":3494},"Lower loan amounts",[3495,3496],{"type":98},{"type":52,"attrs":3497},{"color":2847},{"text":3499,"type":45,"marks":3500},": Compared to secured loans, unsecured personal loans usually come with lower loan amounts, as lenders may be more cautious about granting larger sums without collateral.",[3501],{"type":52,"attrs":3502},{"color":2847},{"type":41,"content":3504},[3505],{"text":3506,"type":45,"marks":3507},"Keep in mind that, because you have no collateral securing the loan, defaulting on an unsecured personal loan could result in legal action, damage to your credit score, and collection efforts by the lender.",[3508],{"type":52,"attrs":3509},{"color":2847},{"type":90,"attrs":3511,"content":3512},{"level":92},[3513],{"text":3514,"type":45,"marks":3515},"Compare loans on Navient Marketplace",[3516],{"type":52,"attrs":3517},{"color":2847},{"type":41,"content":3519},[3520,3525,3534],{"text":3521,"type":45,"marks":3522},"A HELOC is a great real estate investing tool and a good way to tap into your property’s equity to get a large cash injection. This can be useful for managing business cash flow or for meeting surprise expenses. However, HELOCs aren’t the best choice for every property owner. If you’re looking for alternative funding options, ",[3523],{"type":52,"attrs":3524},{"color":2847},{"text":3526,"type":45,"marks":3527},"consider a personal loan",[3528,3531,3533],{"type":66,"attrs":3529},{"href":3530,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/should-i-get-a-personal-loan/",{"type":52,"attrs":3532},{"color":2847},{"type":76},{"text":3535,"type":45,"marks":3536},". Personal loans can provide swift access to large lump sums of cash. They also tend to offer lower interest rates than credit cards or open lines of credit. ",[3537],{"type":52,"attrs":3538},{"color":2847},{"type":41,"content":3540},[3541,3546,3554],{"text":3542,"type":45,"marks":3543},"A personal loan marketplace can give you a better idea of your options and help ensure that you’re getting the best rates. To further streamline the process, Navient Marketplace collaborates with MoneyLion, a leading personal loan search tool. Explore your options and find personalized loan rates by visiting",[3544],{"type":52,"attrs":3545},{"color":2847},{"text":3547,"type":45,"marks":3548}," our marketplace",[3549,3551,3553],{"type":66,"attrs":3550},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":3552},{"color":2847},{"type":76},{"text":3555,"type":45,"marks":3556}," today.",[3557],{"type":52,"attrs":3558},{"color":2847},{"type":41,"content":3560},[3561],{"text":755,"type":45,"marks":3562},[3563],{"type":48,"attrs":3564},{"class":50},{"type":41,"content":3566},[3567],{"text":3568,"type":45,"marks":3569},"Navient customers are invited to consider personal loan offers through our partner MoneyLion. Navient has not shared your information with MoneyLion and is not involved in the personal loan application process in any manner. All information is submitted directly to MoneyLion and any personal loan offers are made directly by participants in MoneyLion’s lending platform. Engine by MoneyLion is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. ",[3570],{"type":48,"attrs":3571},{"class":50},{"type":41,"content":3573},[3574],{"text":3575,"type":45,"marks":3576},"Loan proceeds may not be used for postsecondary educational expenses, including refinancing federal or private student loans.",[3577],{"type":48,"attrs":3578},{"class":50},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798156\"}-->","https://www.marketplace.navient.com/blog/can-you-get-a-heloc-on-an-investment-property/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798156\"}-->","can-you-get-a-heloc-on-an-investment-property","navient_marketplace/blog/can-you-get-a-heloc-on-an-investment-property",[],"b4d32726-e8b3-4d34-a661-867737ea0c28","/blog/can-you-get-a-heloc-on-an-investment-property/",[],{"name":3589,"created_at":3590,"published_at":3591,"updated_at":3592,"id":3593,"uuid":3594,"content":3595,"slug":4519,"full_slug":4520,"sort_by_date":69,"position":768,"tag_list":4521,"is_startpage":28,"parent_id":770,"meta_data":69,"group_id":4522,"first_published_at":2813,"release_id":69,"lang":773,"path":4523,"alternates":4524,"default_full_slug":69,"translated_slugs":69},"Consolidating Debt With a Personal Loan","2025-04-07T18:30:14.666Z","2025-12-26T13:45:00.467Z","2025-12-26T13:45:00.499Z",651798155,"4cae09ea-ee1d-4740-bb2e-93abc4ad505b",{"seo":3596,"_uid":20,"hero":3599,"author":2834,"category":942,"featured":28,"imageAlt":18,"component":32,"blogContents":3604,"canonicalTag":4517,"publishedDate":764,"_editable":4518},{"_uid":15,"title":3597,"plugin":17,"og_image":18,"og_title":18,"description":3598,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Consolidating Debt With a Personal Loan | Navient Marketplace","This financial strategy can give you the chance to simplify your debts and put you back in control. Learn whether this is the right solution for you.",[3600],{"id":18,"_uid":23,"image":3601,"intro":3598,"classes":18,"_editable":3602,"blogTitle":3589,"component":26,"imageLink":3603,"blendImage":28,"backgroundColor":29},"//a.storyblok.com/f/110029/3579x2736/175a40617b/consolidating-debt-with-personal-loan.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798155\"}-->","/images/consolidating-debt-with-personal-loan.png",[3605],{"_uid":35,"color":36,"richText":3606,"_editable":4516,"component":762},{"type":38,"content":3607},[3608,3616,3635,3642,3650,3679,3687,3694,3702,3723,3730,3738,3745,3752,3760,3780,3789,3851,3859,3932,3940,3947,3955,3962,3969,3990,3998,4005,4043,4064,4072,4079,4154,4170,4178,4199,4217,4224,4232,4239,4259,4267,4287,4295,4302,4309,4317,4324,4450,4458,4465,4491,4499,4508],{"type":41,"content":3609},[3610],{"text":44,"type":45,"marks":3611},[3612,3614],{"type":48,"attrs":3613},{"class":50},{"type":52,"attrs":3615},{"color":2847},{"type":41,"content":3617},[3618,3623,3630],{"text":3619,"type":45,"marks":3620},"Managing multiple debts can feel like a relentless juggling act, with each bill vying for your precious extra cash. Fortunately, there’s a potential solution that can simplify the choreography: consolidating debt with a ",[3621],{"type":52,"attrs":3622},{"color":2847},{"text":1997,"type":45,"marks":3624},[3625,3627,3629],{"type":66,"attrs":3626},{"href":3383,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":3628},{"color":2847},{"type":76},{"text":3631,"type":45,"marks":3632},". This financial strategy can give you the chance to simplify your debts and put you back in control. ",[3633],{"type":52,"attrs":3634},{"color":2847},{"type":41,"content":3636},[3637],{"text":3638,"type":45,"marks":3639},"Debt consolidation can offer both immediate relief and long-term financial gains. It can help you reduce your interest rates and your monthly payment amounts to help you get out of debt faster. Here’s how consolidating debt with a personal loan works.  ",[3640],{"type":52,"attrs":3641},{"color":2847},{"type":90,"attrs":3643,"content":3644},{"level":92},[3645],{"text":3646,"type":45,"marks":3647},"Key takeaways",[3648],{"type":52,"attrs":3649},{"color":2847},{"type":507,"content":3651},[3652,3661,3670],{"type":139,"content":3653},[3654],{"type":41,"content":3655},[3656],{"text":3657,"type":45,"marks":3658},"A debt consolidation loan is a type of personal loan, designed to consolidate and repay existing debts.",[3659],{"type":52,"attrs":3660},{"color":2847},{"type":139,"content":3662},[3663],{"type":41,"content":3664},[3665],{"text":3666,"type":45,"marks":3667},"Debt consolidation simplifies your financial life by combining multiple debts into a single, consistent monthly payment to a single lender. ",[3668],{"type":52,"attrs":3669},{"color":2847},{"type":139,"content":3671},[3672],{"type":41,"content":3673},[3674],{"text":3675,"type":45,"marks":3676},"After you consolidate, it’s critical to maintain responsible financial habits while you repay your new personal loan. ",[3677],{"type":52,"attrs":3678},{"color":2847},{"type":90,"attrs":3680,"content":3681},{"level":92},[3682],{"text":3683,"type":45,"marks":3684},"Personal loan vs debt consolidation loan: What’s the difference? ",[3685],{"type":52,"attrs":3686},{"color":2847},{"type":41,"content":3688},[3689],{"text":3690,"type":45,"marks":3691},"A personal loan is a type of debt consolidation loan. These loans can help people manage their debt more effectively. Here’s how they work:",[3692],{"type":52,"attrs":3693},{"color":2847},{"type":90,"attrs":3695,"content":3696},{"level":902},[3697],{"text":3698,"type":45,"marks":3699},"What is a personal loan? ",[3700],{"type":52,"attrs":3701},{"color":2847},{"type":41,"content":3703},[3704,3709,3718],{"text":3705,"type":45,"marks":3706},"A personal loan is a type of loan that can be used for various purposes, including home improvements, medical expenses, or debt consolidation. It is usually an ",[3707],{"type":52,"attrs":3708},{"color":2847},{"text":3710,"type":45,"marks":3711},"unsecured loan",[3712,3715,3717],{"type":66,"attrs":3713},{"href":3714,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/secured-vs-unsecured-loans/",{"type":52,"attrs":3716},{"color":2847},{"type":76},{"text":3719,"type":45,"marks":3720},", meaning it doesn't require collateral. ",[3721],{"type":52,"attrs":3722},{"color":2847},{"type":41,"content":3724},[3725],{"text":3726,"type":45,"marks":3727},"With a personal loan, you receive a lump sum of money upfront, then repay it over a fixed period of time, typically in monthly installments with a fixed interest rate. The funds from a personal loan can be used at your discretion, and there are generally no restrictions on how you use the money.",[3728],{"type":52,"attrs":3729},{"color":2847},{"type":90,"attrs":3731,"content":3732},{"level":902},[3733],{"text":3734,"type":45,"marks":3735},"What is a debt consolidation loan? ",[3736],{"type":52,"attrs":3737},{"color":2847},{"type":41,"content":3739},[3740],{"text":3741,"type":45,"marks":3742},"A debt consolidation loan is a type of personal loan designed to help people pay off and merge their existing debts into one single loan — essentially a DIY refinance. This involves taking out a new loan to pay off multiple debts, such as credit card debt, payday loans, or other high-interest loans. Instead of making multiple loan payments to different creditors each month, a debt consolidation loan allows you to make one monthly payment to a single lender.",[3743],{"type":52,"attrs":3744},{"color":2847},{"type":41,"content":3746},[3747],{"text":3748,"type":45,"marks":3749},"The primary goal of a debt consolidation loan is to streamline your debt and potentially secure a lower interest rate, which could save you significant money over time. It's worth noting that while all debt consolidation loans are personal loans, not all personal loans are debt consolidation loans. The main difference between these two is that personal loans can be used for a wide range of purposes beyond debt consolidation, while debt consolidation loans serve the specific purpose of consolidating and repaying existing debts.",[3750],{"type":52,"attrs":3751},{"color":2847},{"type":90,"attrs":3753,"content":3754},{"level":902},[3755],{"text":3756,"type":45,"marks":3757},"The pros and cons of consolidating debt with a personal loan",[3758],{"type":52,"attrs":3759},{"color":2847},{"type":41,"content":3761},[3762,3767,3775],{"text":3763,"type":45,"marks":3764},"Debt consolidation can be helpful, but it’s not for everyone. Carefully consider these pros and cons to decide whether consolidating debt ",[3765],{"type":52,"attrs":3766},{"color":2847},{"text":3768,"type":45,"marks":3769},"with a personal loan",[3770,3772,3774],{"type":66,"attrs":3771},{"href":3404,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":3773},{"color":2847},{"type":76},{"text":3776,"type":45,"marks":3777}," is the right choice for you. ",[3778],{"type":52,"attrs":3779},{"color":2847},{"type":90,"attrs":3781,"content":3783},{"level":3782},4,[3784],{"text":3785,"type":45,"marks":3786},"Pros of debt consolidation with a personal loan ",[3787],{"type":52,"attrs":3788},{"color":2847},{"type":507,"content":3790},[3791,3806,3821,3836],{"type":139,"content":3792},[3793],{"type":41,"content":3794},[3795,3801],{"text":3796,"type":45,"marks":3797},"Simplified repayment:",[3798,3799],{"type":98},{"type":52,"attrs":3800},{"color":2847},{"text":3802,"type":45,"marks":3803}," One of the primary benefits of debt consolidation is the ability to streamline your debts into a single monthly payment. Instead of juggling multiple payment due dates and amounts, you can focus on making one fixed payment to a single lender.",[3804],{"type":52,"attrs":3805},{"color":2847},{"type":139,"content":3807},[3808],{"type":41,"content":3809},[3810,3816],{"text":3811,"type":45,"marks":3812},"Potentially lower interest rates:",[3813,3814],{"type":98},{"type":52,"attrs":3815},{"color":2847},{"text":3817,"type":45,"marks":3818}," If you have high-interest debts, such as credit card balances or payday loans, consolidating them with a personal loan may allow you to secure a lower interest rate, which can save you a significant amount of money in the long run. You may also be able to get a lower interest rate if your credit score has improved since you took out your original loan. ",[3819],{"type":52,"attrs":3820},{"color":2847},{"type":139,"content":3822},[3823],{"type":41,"content":3824},[3825,3831],{"text":3826,"type":45,"marks":3827},"Fixed monthly payments:",[3828,3829],{"type":98},{"type":52,"attrs":3830},{"color":2847},{"text":3832,"type":45,"marks":3833}," Personal loans often have fixed interest rates and clear repayment terms. That means you'll know exactly how much you need to pay each month and when you can expect to become debt-free. This can help you create a clear budget and financial timeline.",[3834],{"type":52,"attrs":3835},{"color":2847},{"type":139,"content":3837},[3838],{"type":41,"content":3839},[3840,3846],{"text":3841,"type":45,"marks":3842},"Manageable monthly bills:",[3843,3844],{"type":98},{"type":52,"attrs":3845},{"color":2847},{"text":3847,"type":45,"marks":3848}," Since personal loans often have longer loan terms than other financing options, your repayment period is spread out over more months, translating to lower monthly bills. ",[3849],{"type":52,"attrs":3850},{"color":2847},{"type":90,"attrs":3852,"content":3853},{"level":3782},[3854],{"text":3855,"type":45,"marks":3856},"Cons of debt consolidation with a personal loan",[3857],{"type":52,"attrs":3858},{"color":2847},{"type":507,"content":3860},[3861,3887,3902,3917],{"type":139,"content":3862},[3863],{"type":41,"content":3864},[3865,3871,3876,3882],{"text":3866,"type":45,"marks":3867},"Risk of accumulating new debt:",[3868,3869],{"type":98},{"type":52,"attrs":3870},{"color":2847},{"text":3872,"type":45,"marks":3873}," When you use a consolidation loan to pay off existing debts, you’ll have more credit available to use on those accounts. Without responsible financial habits, though, you may be at risk of accumulating new debt while still repaying the personal loan. Remember –– even though you’ve paid off all your outstanding debt with a personal loan, ",[3874],{"type":52,"attrs":3875},{"color":2847},{"text":3877,"type":45,"marks":3878},"you’re still only replacing that debt with a different type of debt.",[3879,3880],{"type":1488},{"type":52,"attrs":3881},{"color":2847},{"text":3883,"type":45,"marks":3884}," It is essential to exercise discipline and avoid falling back into old spending habits.",[3885],{"type":52,"attrs":3886},{"color":2847},{"type":139,"content":3888},[3889],{"type":41,"content":3890},[3891,3897],{"text":3892,"type":45,"marks":3893},"Potential origination or prepayment fees",[3894,3895],{"type":98},{"type":52,"attrs":3896},{"color":2847},{"text":3898,"type":45,"marks":3899},": Some lenders, including banks, credit unions, or online lenders, charge origination fees at the outset of the loan, which can add to its cost. Additionally, certain loans may have prepayment penalties if you choose to pay off the loan early. Be sure to carefully review the loan terms and any associated fees before proceeding with a debt consolidation loan.",[3900],{"type":52,"attrs":3901},{"color":2847},{"type":139,"content":3903},[3904],{"type":41,"content":3905},[3906,3912],{"text":3907,"type":45,"marks":3908},"Impact on credit score",[3909,3910],{"type":98},{"type":52,"attrs":3911},{"color":2847},{"text":3913,"type":45,"marks":3914},": Initially, applying for a personal loan may result in a temporary dip in your credit score due to the hard credit inquiry on your credit report. However, by making timely debt payments and reducing your debt load, your score should recover and potentially improve in the long run. ",[3915],{"type":52,"attrs":3916},{"color":2847},{"type":139,"content":3918},[3919],{"type":41,"content":3920},[3921,3927],{"text":3922,"type":45,"marks":3923},"Harder to qualify for",[3924,3925],{"type":98},{"type":52,"attrs":3926},{"color":2847},{"text":3928,"type":45,"marks":3929},": Since most personal loans are unsecured, they’re riskier for the lender than secured loans are. For that reason, you generally need a good credit score to qualify for an unsecured personal loan.",[3930],{"type":52,"attrs":3931},{"color":2847},{"type":90,"attrs":3933,"content":3934},{"level":92},[3935],{"text":3936,"type":45,"marks":3937},"How to get a debt consolidation loan",[3938],{"type":52,"attrs":3939},{"color":2847},{"type":41,"content":3941},[3942],{"text":3943,"type":45,"marks":3944},"If you find yourself juggling multiple payments with high interest rates, debt consolidation may be right for you. Here’s how to get a debt consolidation loan.",[3945],{"type":52,"attrs":3946},{"color":2847},{"type":90,"attrs":3948,"content":3949},{"level":902},[3950],{"text":3951,"type":45,"marks":3952},"Step 1: Assess your debt",[3953],{"type":52,"attrs":3954},{"color":2847},{"type":41,"content":3956},[3957],{"text":3958,"type":45,"marks":3959},"Before you apply for a debt consolidation loan, compile a comprehensive list of all your outstanding debts. This may include credit cards, personal loans, student loans, or medical bills. For each loan, write down your outstanding balances, interest rates, minimum monthly payments, and due dates. ",[3960],{"type":52,"attrs":3961},{"color":2847},{"type":41,"content":3963},[3964],{"text":3965,"type":45,"marks":3966},"Next, Identify debts with high interest rates. These high-cost debts can wreak havoc on your finances and are therefore prime candidates for consolidation. If you don’t want to consolidate all your eligible debts, it may be worthwhile to prioritize those with the highest interest rates first. That’s because consolidating these can help you secure dramatically lower rates and, as a result, save you the most money. ",[3967],{"type":52,"attrs":3968},{"color":2847},{"type":41,"content":3970},[3971,3976,3985],{"text":3972,"type":45,"marks":3973},"Once you’ve added up the outstanding balances of the debts you intend to consolidate, you’ll have a better idea of what size personal loan you’ll need. Once you have this number, you’ll be able to ",[3974],{"type":52,"attrs":3975},{"color":2847},{"text":3977,"type":45,"marks":3978},"use a loan calculator",[3979,3982,3984],{"type":66,"attrs":3980},{"href":3981,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.aarp.org/money/credit-loans-debt/debt_consolidation_calculator.html",{"type":52,"attrs":3983},{"color":2847},{"type":76},{"text":3986,"type":45,"marks":3987}," to estimate your monthly payments. Make sure you have the budget to comfortably make these payments.",[3988],{"type":52,"attrs":3989},{"color":2847},{"type":90,"attrs":3991,"content":3992},{"level":902},[3993],{"text":3994,"type":45,"marks":3995},"Step 2: Pull your credit report",[3996],{"type":52,"attrs":3997},{"color":2847},{"type":41,"content":3999},[4000],{"text":4001,"type":45,"marks":4002},"Lenders offer various loan products based on creditworthiness. Generally, the better your credit, the more options you’ll have. ",[4003],{"type":52,"attrs":4004},{"color":2847},{"type":507,"content":4006},[4007,4016,4025,4034],{"type":139,"content":4008},[4009],{"type":41,"content":4010},[4011],{"text":4012,"type":45,"marks":4013},"An excellent credit score (typically 720 or higher) will qualify you for the lowest rates. ",[4014],{"type":52,"attrs":4015},{"color":2847},{"type":139,"content":4017},[4018],{"type":41,"content":4019},[4020],{"text":4021,"type":45,"marks":4022},"A good credit score (670-719) still allows you to access competitive loan rates. ",[4023],{"type":52,"attrs":4024},{"color":2847},{"type":139,"content":4026},[4027],{"type":41,"content":4028},[4029],{"text":4030,"type":45,"marks":4031},"A fair credit score (580-669) may limit your options for unsecured loans. Instead, you might want to consider a secured loan. ",[4032],{"type":52,"attrs":4033},{"color":2847},{"type":139,"content":4035},[4036],{"type":41,"content":4037},[4038],{"text":4039,"type":45,"marks":4040},"If you have poor credit (below 580), explore secured loans, cosigner arrangements, or credit-building loans may be necessary.",[4041],{"type":52,"attrs":4042},{"color":2847},{"type":41,"content":4044},[4045,4050,4059],{"text":4046,"type":45,"marks":4047},"If you have bad credit, this may be the time to work on improving your credit score. Pay down current debts, make timely payments, and avoid taking on new debts. Make sure to ",[4048],{"type":52,"attrs":4049},{"color":2847},{"text":4051,"type":45,"marks":4052},"obtain your credit report",[4053,4056,4058],{"type":66,"attrs":4054},{"href":4055,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.usa.gov/credit-reports",{"type":52,"attrs":4057},{"color":2847},{"type":76},{"text":4060,"type":45,"marks":4061}," and check for errors. If you find inaccuracies, file a dispute to correct these before applying for a new loan. ",[4062],{"type":52,"attrs":4063},{"color":2847},{"type":90,"attrs":4065,"content":4066},{"level":902},[4067],{"text":4068,"type":45,"marks":4069},"Step 3: Compare lenders",[4070],{"type":52,"attrs":4071},{"color":2847},{"type":41,"content":4073},[4074],{"text":4075,"type":45,"marks":4076},"It’s important to compare lenders to secure the best personal loan rates and terms. Here are the factors to consider when evaluating lenders:",[4077],{"type":52,"attrs":4078},{"color":2847},{"type":507,"content":4080},[4081,4109,4124,4139],{"type":139,"content":4082},[4083],{"type":41,"content":4084},[4085,4090,4095,4104],{"text":2921,"type":45,"marks":4086},[4087,4088],{"type":98},{"type":52,"attrs":4089},{"color":2847},{"text":4091,"type":45,"marks":4092}," Compare ",[4093],{"type":52,"attrs":4094},{"color":2847},{"text":4096,"type":45,"marks":4097},"annual percentage rates (APRs)",[4098,4101,4103],{"type":66,"attrs":4099},{"href":4100,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-card-interest-rate-what-does-apr-mean-en-44/",{"type":52,"attrs":4102},{"color":2847},{"type":76},{"text":4105,"type":45,"marks":4106}," to understand how much your loan will cost with each lender. ",[4107],{"type":52,"attrs":4108},{"color":2847},{"type":139,"content":4110},[4111],{"type":41,"content":4112},[4113,4119],{"text":4114,"type":45,"marks":4115},"Fees: ",[4116,4117],{"type":98},{"type":52,"attrs":4118},{"color":2847},{"text":4120,"type":45,"marks":4121},"Be aware of origination fees, prepayment penalties, or other charges that could affect your loan’s affordability.",[4122],{"type":52,"attrs":4123},{"color":2847},{"type":139,"content":4125},[4126],{"type":41,"content":4127},[4128,4134],{"text":4129,"type":45,"marks":4130},"Loan terms:",[4131,4132],{"type":98},{"type":52,"attrs":4133},{"color":2847},{"text":4135,"type":45,"marks":4136}," Longer terms result in lower monthly payment amounts but higher interest costs over the life of the loan. ",[4137],{"type":52,"attrs":4138},{"color":2847},{"type":139,"content":4140},[4141],{"type":41,"content":4142},[4143,4149],{"text":4144,"type":45,"marks":4145},"Customer reviews: ",[4146,4147],{"type":98},{"type":52,"attrs":4148},{"color":2847},{"text":4150,"type":45,"marks":4151},"Research a lender’s reputation by reading online reviews and looking for customer service ratings. ",[4152],{"type":52,"attrs":4153},{"color":2847},{"type":41,"content":4155},[4156,4165],{"text":4157,"type":45,"marks":4158},"Personal loan marketplaces",[4159,4162,4164],{"type":66,"attrs":4160},{"href":4161,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/what-is-a-personal-loan-marketplace/",{"type":52,"attrs":4163},{"color":2847},{"type":76},{"text":4166,"type":45,"marks":4167}," such as Navient Marketplace allow you to compare loan offers from multiple lenders. By inputting your information once, you can receive multiple personalized loan options based on your needs and eligibility. Comparing lenders through loan marketplaces can help you discover loans that align with your financial needs while saving you money in the long run.",[4168],{"type":52,"attrs":4169},{"color":2847},{"type":90,"attrs":4171,"content":4172},{"level":902},[4173],{"text":4174,"type":45,"marks":4175},"Step 4: Get prequalified",[4176],{"type":52,"attrs":4177},{"color":2847},{"type":41,"content":4179},[4180,4185,4194],{"text":4181,"type":45,"marks":4182},"Prequalification is a useful tool when you’re shopping for personal loans. It allows you to compare offers from different lenders without a ",[4183],{"type":52,"attrs":4184},{"color":2847},{"text":4186,"type":45,"marks":4187},"hard credit check",[4188,4191,4193],{"type":66,"attrs":4189},{"href":4190,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://navirefi.com/blog/soft-inquiry-vs-hard-inquiry/",{"type":52,"attrs":4192},{"color":2847},{"type":76},{"text":4195,"type":45,"marks":4196},". (A hard credit check, or hard credit inquiry, happens when lenders formally review your credit report and can result in a small, temporary drop to your credit score.) Prequalification provides a rough estimate of your borrowing potential and helps you identify lenders and loan products that align with your financial situation and needs. It only involves a “soft credit check,” which doesn’t impact your score.",[4197],{"type":52,"attrs":4198},{"color":2847},{"type":41,"content":4200},[4201,4206,4213],{"text":4202,"type":45,"marks":4203},"To get prequalified, you’ll need to provide some basic information to a lender, typically online or through a quick phone call. Once they’ve performed a preliminary evaluation of your financial situation through a soft credit check, they’ll give you an estimate of how much money you can borrow and at what interest rate. The interest rate you’ll prequalify for is usually based on factors like your credit history, income, employment status, credit utilization ratio, and ",[4204],{"type":52,"attrs":4205},{"color":2847},{"text":263,"type":45,"marks":4207},[4208,4210,4212],{"type":66,"attrs":4209},{"href":267,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":4211},{"color":2847},{"type":76},{"text":934,"type":45,"marks":4214},[4215],{"type":52,"attrs":4216},{"color":2847},{"type":41,"content":4218},[4219],{"text":4220,"type":45,"marks":4221},"It’s important to note that prequalification is not a guarantee that you’ll be approved for a certain loan amount or interest rate. It’s simply an initial step that gives you an idea of what you may qualify for. ",[4222],{"type":52,"attrs":4223},{"color":2847},{"type":90,"attrs":4225,"content":4226},{"level":902},[4227],{"text":4228,"type":45,"marks":4229},"Step 5: Apply for the loan",[4230],{"type":52,"attrs":4231},{"color":2847},{"type":41,"content":4233},[4234],{"text":4235,"type":45,"marks":4236},"Once you’ve selected a lender, it’s time to apply for the loan. Most lenders offer online applications for convenience. You’ll need to provide essential documentation, including proof of identity, income verification (such as pay stubs or tax returns), details about your outstanding debts, and bank statements. The application process usually takes anywhere from 15 minutes to an hour to complete, depending on the lender and the complexity of your financial situation.",[4237],{"type":52,"attrs":4238},{"color":2847},{"type":41,"content":4240},[4241,4246,4254],{"text":4242,"type":45,"marks":4243},"After submission, the lender will review your loan application, conduct a credit check, and assess your eligibility. You can apply directly through the lender’s website, visit a physical branch, if available, or use a personal loan marketplace such as ",[4244],{"type":52,"attrs":4245},{"color":2847},{"text":2786,"type":45,"marks":4247},[4248,4251,4253],{"type":66,"attrs":4249},{"href":4250,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com",{"type":52,"attrs":4252},{"color":2847},{"type":76},{"text":4255,"type":45,"marks":4256},", that allows you to compare multiple lenders and complete applications from a single platform.",[4257],{"type":52,"attrs":4258},{"color":2847},{"type":90,"attrs":4260,"content":4261},{"level":902},[4262],{"text":4263,"type":45,"marks":4264},"Step 6: Pay off existing debts",[4265],{"type":52,"attrs":4266},{"color":2847},{"type":41,"content":4268},[4269,4274,4282],{"text":4270,"type":45,"marks":4271},"Once your loan is approved and the funds are disbursed, put the money to work by ",[4272],{"type":52,"attrs":4273},{"color":2847},{"text":4275,"type":45,"marks":4276},"paying off your existing debts",[4277,4279,4281],{"type":66,"attrs":4278},{"href":2016,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":4280},{"color":2847},{"type":76},{"text":4283,"type":45,"marks":4284},". Allocate the funds strategically, starting with high-interest debts like credit cards or payday loans. By doing so, you can reduce the overall interest you’ll pay and free up more money for other financial goals. ",[4285],{"type":52,"attrs":4286},{"color":2847},{"type":90,"attrs":4288,"content":4289},{"level":902},[4290],{"text":4291,"type":45,"marks":4292},"Step 7: Create a repayment plan",[4293],{"type":52,"attrs":4294},{"color":2847},{"type":41,"content":4296},[4297],{"text":4298,"type":45,"marks":4299},"Resist the temptation to accumulate new debts while you’re working on paying off existing ones. To create a repayment plan that aligns with your budget, start by assessing your monthly income and expenses. Determine how much you can comfortably allocate toward repaying the consolidation loan without straining your finances. ",[4300],{"type":52,"attrs":4301},{"color":2847},{"type":41,"content":4303},[4304],{"text":4305,"type":45,"marks":4306},"Keep in mind that late payments could cost you fees, setting you back even further. Autopay can be a smart strategy to avoid this. Set up automatic transfers to your loan bank account on or just after each payday. Some lenders also provide a rate discount for borrowers who enroll in autopay. ",[4307],{"type":52,"attrs":4308},{"color":2847},{"type":90,"attrs":4310,"content":4311},{"level":92},[4312],{"text":4313,"type":45,"marks":4314},"Alternatives to consolidating debt with a personal loan ",[4315],{"type":52,"attrs":4316},{"color":2847},{"type":41,"content":4318},[4319],{"text":4320,"type":45,"marks":4321},"Consolidating debt can be done with more than just a personal loan. If you don’t think a debt consolidation loan is right for you, here are some other options to explore: ",[4322],{"type":52,"attrs":4323},{"color":2847},{"type":134,"attrs":4325,"content":4326},{"order":136},[4327,4342,4357,4382,4401,4425],{"type":139,"content":4328},[4329],{"type":41,"content":4330},[4331,4337],{"text":4332,"type":45,"marks":4333},"Balance transfer credit cards:",[4334,4335],{"type":98},{"type":52,"attrs":4336},{"color":2847},{"text":4338,"type":45,"marks":4339}," These credit cards allow you to transfer high-interest credit card balances to a new card with a lower or zero percent introductory interest rate. This can help save money on interest charges while consolidating debt. The rates on these cards generally skyrocket after the introductory period and there may be a balance transfer fee, so pay off as much as you can before it ends. ",[4340],{"type":52,"attrs":4341},{"color":2847},{"type":139,"content":4343},[4344],{"type":41,"content":4345},[4346,4352],{"text":4347,"type":45,"marks":4348},"Home equity loans and home equity lines of credit (HELOCs)",[4349,4350],{"type":98},{"type":52,"attrs":4351},{"color":2847},{"text":4353,"type":45,"marks":4354},": If you own a home and have built up equity, you may be able to use a home equity loan or HELOC to consolidate debt. These loans allow you to borrow against the equity in your home and typically offer lower rates than personal loans. Keep in mind, these are secured loans backed by your house ––  so if you default, the lender is within their rights to repossess your home. ",[4355],{"type":52,"attrs":4356},{"color":2847},{"type":139,"content":4358},[4359],{"type":41,"content":4360},[4361,4371,4377],{"text":4362,"type":45,"marks":4363},"Debt management plans",[4364,4367,4368,4370],{"type":66,"attrs":4365},{"href":4366,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.debt.org/management-plans/",{"type":98},{"type":52,"attrs":4369},{"color":2847},{"type":76},{"text":4372,"type":45,"marks":4373}," (DMPs)",[4374,4375],{"type":98},{"type":52,"attrs":4376},{"color":2847},{"text":4378,"type":45,"marks":4379},": DMPs are offered by credit counseling agencies and involve consolidating multiple debts into a single payment. The agency negotiates with creditors to potentially reduce interest rates and create a manageable repayment plan. ",[4380],{"type":52,"attrs":4381},{"color":2847},{"type":139,"content":4383},[4384],{"type":41,"content":4385},[4386,4396],{"text":4387,"type":45,"marks":4388},"Debt settlement:",[4389,4392,4393,4395],{"type":66,"attrs":4390},{"href":4391,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.debt.org/settlement/",{"type":98},{"type":52,"attrs":4394},{"color":2847},{"type":76},{"text":4397,"type":45,"marks":4398}," Debt settlement involves negotiating with creditors to settle your debts for less than the full amount owed. This option typically requires working with a debt settlement company or negotiating directly with creditors.",[4399],{"type":52,"attrs":4400},{"color":2847},{"type":139,"content":4402},[4403],{"type":41,"content":4404},[4405,4415,4420],{"text":4406,"type":45,"marks":4407},"401(k) Loans",[4408,4411,4412,4414],{"type":66,"attrs":4409},{"href":4410,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.irs.gov/retirement-plans/considering-a-loan-from-your-401k-plan",{"type":98},{"type":52,"attrs":4413},{"color":2847},{"type":76},{"text":3409,"type":45,"marks":4416},[4417,4418],{"type":98},{"type":52,"attrs":4419},{"color":2847},{"text":4421,"type":45,"marks":4422}," If you have a retirement savings account, such as a 401(k), you may be able to take out a loan against it to consolidate debt. It's important to carefully consider the potential impact on your retirement savings and consult with a financial advisor before opting for this approach. ",[4423],{"type":52,"attrs":4424},{"color":2847},{"type":139,"content":4426},[4427],{"type":41,"content":4428},[4429,4439,4445],{"text":4430,"type":45,"marks":4431},"Peer-to-peer lending",[4432,4435,4436,4438],{"type":66,"attrs":4433},{"href":4434,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.debt.org/credit/solutions/peer-lending/",{"type":98},{"type":52,"attrs":4437},{"color":2847},{"type":76},{"text":4440,"type":45,"marks":4441},": ",[4442,4443],{"type":98},{"type":52,"attrs":4444},{"color":2847},{"text":4446,"type":45,"marks":4447},"Peer-to-peer lending platforms connect borrowers with individual investors who provide loans. This can be an alternative source of loan funding for debt consolidation, especially for those who may not qualify for traditional personal loans.",[4448],{"type":52,"attrs":4449},{"color":2847},{"type":90,"attrs":4451,"content":4452},{"level":92},[4453],{"text":4454,"type":45,"marks":4455},"Shop debt consolidation loans on Navient Marketplace ",[4456],{"type":52,"attrs":4457},{"color":2847},{"type":41,"content":4459},[4460],{"text":4461,"type":45,"marks":4462},"Consolidating debt with a personal loan can be an easy way to refinance your debts and get back on track toward paying them off. However, it's important to approach this process with careful planning and research. Assess your debt, compare lenders, and calculate the total costs involved. Once you've made an informed decision, apply for the personal loan and use it to pay off your existing debts. ",[4463],{"type":52,"attrs":4464},{"color":2847},{"type":41,"content":4466},[4467,4472,4478,4486],{"text":4468,"type":45,"marks":4469},"Ready to shop for a personal loan? With Navient Marketplace, you can compare lenders for free all in one place. Just enter a few details about yourself and",[4470],{"type":52,"attrs":4471},{"color":2847},{"text":1853,"type":45,"marks":4473},[4474,4476],{"type":66,"attrs":4475},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":4477},{"color":2847},{"text":4479,"type":45,"marks":4480},"get personalized results from debt consolidation lenders in minutes",[4481,4483,4485],{"type":66,"attrs":4482},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":4484},{"color":2847},{"type":76},{"text":4487,"type":45,"marks":4488},".",[4489],{"type":52,"attrs":4490},{"color":2847},{"type":41,"content":4492},[4493],{"text":755,"type":45,"marks":4494},[4495,4497],{"type":48,"attrs":4496},{"class":50},{"type":52,"attrs":4498},{"color":2847},{"type":41,"content":4500},[4501],{"text":4502,"type":45,"marks":4503},"Navient customers are invited to consider personal loan offers through our partner MoneyLion. Navient has not shared your information with MoneyLion and is not involved in the personal loan application process in any manner. All information is submitted directly to MoneyLion and any personal loan offers are made directly by participants in MoneyLion’s lending platform. Engine by MoneyLion is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. ",[4504,4506],{"type":48,"attrs":4505},{"class":50},{"type":52,"attrs":4507},{"color":2847},{"type":41,"content":4509},[4510],{"text":3575,"type":45,"marks":4511},[4512,4514],{"type":48,"attrs":4513},{"class":50},{"type":52,"attrs":4515},{"color":2847},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798155\"}-->","https://www.marketplace.navient.com/blog/consolidating-debt-with-personal-loan/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798155\"}-->","consolidating-debt-with-personal-loan","navient_marketplace/blog/consolidating-debt-with-personal-loan",[],"0563e536-901b-4d20-b00e-08df03779c14","blog/consolidating-debt-with-personal-loan",[],{"name":4526,"created_at":4527,"published_at":4528,"updated_at":4529,"id":4530,"uuid":4531,"content":4532,"slug":5340,"full_slug":5341,"sort_by_date":69,"position":768,"tag_list":5342,"is_startpage":28,"parent_id":770,"meta_data":69,"group_id":5343,"first_published_at":2813,"release_id":69,"lang":773,"path":5344,"alternates":5345,"default_full_slug":69,"translated_slugs":69},"Why Are Personal Loan Rates So High? (Plus Tips on How to Lower Them)","2025-04-07T18:30:12.787Z","2025-12-26T13:45:00.724Z","2025-12-26T13:45:00.805Z",651798154,"a8e39f37-0cac-460b-ac11-6351cc3d0158",{"seo":4533,"_uid":20,"hero":4536,"author":2834,"category":942,"featured":28,"imageAlt":18,"component":32,"blogContents":4541,"canonicalTag":5338,"publishedDate":764,"_editable":5339},{"_uid":15,"title":4534,"plugin":17,"og_image":18,"og_title":18,"description":4535,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Why Are Personal Loan Rates So High? (Plus Tips on How to Lower Them) | Navient Marketplace","Personal loan rates are usually high because they’re unsecured, meaning there’s no collateral. Learn how to secure a low rate on a personal loan.",[4537],{"id":18,"_uid":23,"image":4538,"intro":4535,"classes":18,"_editable":4539,"blogTitle":4526,"component":26,"imageLink":4540,"blendImage":28,"backgroundColor":29},"//a.storyblok.com/f/110029/6134x4089/c5b0067c0a/why-are-personal-loan-rates-so-high.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798154\"}-->","/images/why-are-personal-loan-rates-so-high.png",[4542],{"_uid":35,"color":36,"richText":4543,"_editable":5337,"component":762},{"type":38,"content":4544},[4545,4553,4573,4580,4618,4626,4646,4654,4674,4682,4689,4697,4704,4712,4719,4727,4734,4742,4749,4757,4764,4772,4779,4787,4794,4802,4809,4817,4824,4832,4839,4936,4944,4976,4997,5005,5012,5019,5027,5048,5109,5117,5124,5131,5139,5159,5167,5182,5190,5206,5226,5233,5240,5247,5255,5262,5270,5307,5315,5329],{"type":41,"content":4546},[4547],{"text":44,"type":45,"marks":4548},[4549,4551],{"type":48,"attrs":4550},{"class":50},{"type":52,"attrs":4552},{"color":2847},{"type":41,"content":4554},[4555,4560,4568],{"text":4556,"type":45,"marks":4557},"A personal loan can be a useful tool for consolidating debt, making a significant purchase, or funding home renovations. But if you’ve ",[4558],{"type":52,"attrs":4559},{"color":2847},{"text":4561,"type":45,"marks":4562},"shopped around for one",[4563,4565,4567],{"type":66,"attrs":4564},{"href":3383,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":4566},{"color":2847},{"type":76},{"text":4569,"type":45,"marks":4570},", you may have noticed that their interest rates can be higher than other types of loans, like home equity loans or car loans. So, why are personal loan rates so high? And what can you do to lower them?",[4571],{"type":52,"attrs":4572},{"color":2847},{"type":90,"attrs":4574,"content":4575},{"level":92},[4576],{"text":3646,"type":45,"marks":4577},[4578],{"type":52,"attrs":4579},{"color":2847},{"type":507,"content":4581},[4582,4591,4600,4609],{"type":139,"content":4583},[4584],{"type":41,"content":4585},[4586],{"text":4587,"type":45,"marks":4588},"Personal loans are typically unsecured, which means there’s no collateral to back the loan.",[4589],{"type":52,"attrs":4590},{"color":2847},{"type":139,"content":4592},[4593],{"type":41,"content":4594},[4595],{"text":4596,"type":45,"marks":4597},"Your credit score plays a significant role in determining your personal loan interest rate, and a poor credit score can result in a higher interest rate. ",[4598],{"type":52,"attrs":4599},{"color":2847},{"type":139,"content":4601},[4602],{"type":41,"content":4603},[4604],{"text":4605,"type":45,"marks":4606},"Longer loan terms may come with higher interest rates, which allow lenders to mitigate the risk of future interest rate fluctuations.                                                                                 ",[4607],{"type":52,"attrs":4608},{"color":2847},{"type":139,"content":4610},[4611],{"type":41,"content":4612},[4613],{"text":4614,"type":45,"marks":4615},"When the interest rates set by central banks rise, personal loan rates tend to follow suit. ",[4616],{"type":52,"attrs":4617},{"color":2847},{"type":90,"attrs":4619,"content":4620},{"level":92},[4621],{"text":4622,"type":45,"marks":4623},"Six reasons personal loan rates can be high ",[4624],{"type":52,"attrs":4625},{"color":2847},{"type":41,"content":4627},[4628,4633,4641],{"text":4629,"type":45,"marks":4630},"Considering a ",[4631],{"type":52,"attrs":4632},{"color":2847},{"text":1997,"type":45,"marks":4634},[4635,4638,4640],{"type":66,"attrs":4636},{"href":4637,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/how-do-personal-loans-work/",{"type":52,"attrs":4639},{"color":2847},{"type":76},{"text":4642,"type":45,"marks":4643},"? You might be surprised to find that their rates are higher than you expected. Here are six reasons why that can happen. ",[4644],{"type":52,"attrs":4645},{"color":2847},{"type":90,"attrs":4647,"content":4648},{"level":902},[4649],{"text":4650,"type":45,"marks":4651},"No collateral ",[4652],{"type":52,"attrs":4653},{"color":2847},{"type":41,"content":4655},[4656,4661,4669],{"text":4657,"type":45,"marks":4658},"One reason why personal loan rates are higher than other types of loan rates is that personal loans are often unsecured, meaning they do not require collateral. This is in contrast to ",[4659],{"type":52,"attrs":4660},{"color":2847},{"text":4662,"type":45,"marks":4663},"secured loans",[4664,4666,4668],{"type":66,"attrs":4665},{"href":3714,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":4667},{"color":2847},{"type":76},{"text":4670,"type":45,"marks":4671},", like auto loans and mortgages, where the lender can seize the asset to recoup their losses if a borrower fails to repay the loan. With an unsecured loan, lenders face a greater risk of late payments or non-payment. That forces lenders to charge a higher interest rate to make up for any potential losses.",[4672],{"type":52,"attrs":4673},{"color":2847},{"type":90,"attrs":4675,"content":4676},{"level":902},[4677],{"text":4678,"type":45,"marks":4679},"Credit score",[4680],{"type":52,"attrs":4681},{"color":2847},{"type":41,"content":4683},[4684],{"text":4685,"type":45,"marks":4686},"Another factor that can influence personal loan rates is the borrower's FICO score. Your credit score is based on a range of financial data, including past credit history, payment behavior, and length of credit history. Generally, the higher the credit score, the lower the loan's interest rate. Borrowers with lower credit scores are considered riskier to lenders, so lenders may charge these borrowers higher interest rates to compensate for the higher risk.",[4687],{"type":52,"attrs":4688},{"color":2847},{"type":90,"attrs":4690,"content":4691},{"level":902},[4692],{"text":4693,"type":45,"marks":4694},"Loan amount and term",[4695],{"type":52,"attrs":4696},{"color":2847},{"type":41,"content":4698},[4699],{"text":4700,"type":45,"marks":4701},"Loan amount and term can also impact APR (annual percentage rate). Often, larger loan amounts or longer terms result in higher interest rates. With larger loan amounts, lenders are taking on risk by providing a more significant chunk of capital. With longer-term loans, there is more time for everything from economic factors to financial changes to increase the risk of missed payments.",[4702],{"type":52,"attrs":4703},{"color":2847},{"type":90,"attrs":4705,"content":4706},{"level":902},[4707],{"text":4708,"type":45,"marks":4709},"Economic factors",[4710],{"type":52,"attrs":4711},{"color":2847},{"type":41,"content":4713},[4714],{"text":4715,"type":45,"marks":4716},"The state of the broader American economy can also affect unsecured personal loan rates. During times of economic uncertainty, financial institutions may raise interest rates to cover the increased risk. Additionally, as inflation increases and the Federal Reserve raises national rates, borrowing costs will naturally follow.",[4717],{"type":52,"attrs":4718},{"color":2847},{"type":90,"attrs":4720,"content":4721},{"level":902},[4722],{"text":4723,"type":45,"marks":4724},"Lender-specific factors",[4725],{"type":52,"attrs":4726},{"color":2847},{"type":41,"content":4728},[4729],{"text":4730,"type":45,"marks":4731},"Lender-specific factors can also impact personal loan rates. Where one lender may not be willing to serve someone with a lower credit score, another might have a different, more holistic way of measuring creditworthiness that opens up their range of qualified applicants. That’s why it’s important to do your research and shop around for multiple quotes before settling on a personal loan provider.",[4732],{"type":52,"attrs":4733},{"color":2847},{"type":90,"attrs":4735,"content":4736},{"level":92},[4737],{"text":4738,"type":45,"marks":4739},"When borrowing a personal loan makes sense ",[4740],{"type":52,"attrs":4741},{"color":2847},{"type":41,"content":4743},[4744],{"text":4745,"type":45,"marks":4746},"Taking out a personal loan can be a useful financial tool for some people. However, it's essential to evaluate your individual circumstances carefully before deciding whether borrowing money through a personal loan is the right choice for you. Here are a few scenarios when taking out a personal loan can make sense:",[4747],{"type":52,"attrs":4748},{"color":2847},{"type":90,"attrs":4750,"content":4751},{"level":902},[4752],{"text":4753,"type":45,"marks":4754},"Debt consolidation",[4755],{"type":52,"attrs":4756},{"color":2847},{"type":41,"content":4758},[4759],{"text":4760,"type":45,"marks":4761},"Even when personal loan rates are high, they’re still generally lower than credit card rates. That’s why one of the most common reasons people take out personal loans is to consolidate high-interest credit card debt. If you’re in this position, taking out a personal loan to use as a debt consolidation loan can reduce the amount of interest paid over the life of the loan and potentially help pay off debt faster.",[4762],{"type":52,"attrs":4763},{"color":2847},{"type":90,"attrs":4765,"content":4766},{"level":902},[4767],{"text":4768,"type":45,"marks":4769},"Large purchases",[4770],{"type":52,"attrs":4771},{"color":2847},{"type":41,"content":4773},[4774],{"text":4775,"type":45,"marks":4776},"Let’s say you plan on making a significant purchase, such as a car or furniture. In that case, a personal loan may be a better option than using a credit card, which can carry a much higher interest rate. That said, if national rates are high now, or your credit score isn’t in ideal shape to qualify for a lender’s lowest rates, you may want to put that purchase on pause if you can. ",[4777],{"type":52,"attrs":4778},{"color":2847},{"type":90,"attrs":4780,"content":4781},{"level":902},[4782],{"text":4783,"type":45,"marks":4784},"Emergency expenses",[4785],{"type":52,"attrs":4786},{"color":2847},{"type":41,"content":4788},[4789],{"text":4790,"type":45,"marks":4791},"There are times when you can’t wait for the ideal conditions to borrow a personal loan. In case of unforeseen expenses, like medical bills, home emergencies, or other unexpected bills, a personal loan can help cover the costs. They can provide quick access to funds when you need them the most, potentially avoiding high-interest credit card debt.",[4792],{"type":52,"attrs":4793},{"color":2847},{"type":90,"attrs":4795,"content":4796},{"level":902},[4797],{"text":4798,"type":45,"marks":4799},"Home improvements ",[4800],{"type":52,"attrs":4801},{"color":2847},{"type":41,"content":4803},[4804],{"text":4805,"type":45,"marks":4806},"If you’re looking to make significant home improvements or repairs, a personal loan can be a good funding source. Though you may get the best rates with a home loan or a home equity line of credit (HELOC), you’ll also have to put up your home as collateral. That means if you default, the lender has the right to take your property. If you’re not comfortable with that idea, a personal loan may be a better option. ",[4807],{"type":52,"attrs":4808},{"color":2847},{"type":90,"attrs":4810,"content":4811},{"level":92},[4812],{"text":4813,"type":45,"marks":4814},"What you can do to secure a lower rate on a personal loan ",[4815],{"type":52,"attrs":4816},{"color":2847},{"type":41,"content":4818},[4819],{"text":4820,"type":45,"marks":4821},"Fortunately, there are ways to secure a lower interest rate on your next personal loan. This can save you money and make it easier for you to reach your financial goals. Here’s how to get a more favorable rate. ",[4822],{"type":52,"attrs":4823},{"color":2847},{"type":90,"attrs":4825,"content":4826},{"level":902},[4827],{"text":4828,"type":45,"marks":4829},"1. Improve your credit score",[4830],{"type":52,"attrs":4831},{"color":2847},{"type":41,"content":4833},[4834],{"text":4835,"type":45,"marks":4836},"A good credit score is key in securing a lower interest rate on a personal loan. You can improve your creditworthiness with these strategies:",[4837],{"type":52,"attrs":4838},{"color":2847},{"type":507,"content":4840},[4841,4863,4886,4895,4904,4913],{"type":139,"content":4842},[4843],{"type":41,"content":4844},[4845,4850,4858],{"text":4846,"type":45,"marks":4847},"Regularly ",[4848],{"type":52,"attrs":4849},{"color":2847},{"text":4851,"type":45,"marks":4852},"review your credit reports",[4853,4855,4857],{"type":66,"attrs":4854},{"href":4055,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":4856},{"color":2847},{"type":76},{"text":4859,"type":45,"marks":4860}," to ensure accuracy. Dispute any errors or inaccuracies and have them corrected promptly. ",[4861],{"type":52,"attrs":4862},{"color":2847},{"type":139,"content":4864},[4865],{"type":41,"content":4866},[4867,4872,4881],{"text":4868,"type":45,"marks":4869},"Aim to reduce any credit card balances to below 30% of your total credit limit. So, if your total credit limit is $10,000, aim to have no more than $3,000 in credit card debt at any given time. Low ",[4870],{"type":52,"attrs":4871},{"color":2847},{"text":4873,"type":45,"marks":4874},"credit utilization",[4875,4878,4880],{"type":66,"attrs":4876},{"href":4877,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.takechargeamerica.org/what-is-credit-utilization/",{"type":52,"attrs":4879},{"color":2847},{"type":76},{"text":4882,"type":45,"marks":4883}," has a positive impact on your credit score. ",[4884],{"type":52,"attrs":4885},{"color":2847},{"type":139,"content":4887},[4888],{"type":41,"content":4889},[4890],{"text":4891,"type":45,"marks":4892},"Consistently make on-time payments for all your bills, including credit cards, loans, and utilities. If staying organized is hard for you, sign up for autopay so you never miss a payment. ",[4893],{"type":52,"attrs":4894},{"color":2847},{"type":139,"content":4896},[4897],{"type":41,"content":4898},[4899],{"text":4900,"type":45,"marks":4901},"If you have a diverse mix of credit accounts — such as credit cards, installment loans, and a mortgage, for example — this shows that you can balance many types of debts responsibly. ",[4902],{"type":52,"attrs":4903},{"color":2847},{"type":139,"content":4905},[4906],{"type":41,"content":4907},[4908],{"text":4909,"type":45,"marks":4910},"The length of your credit history can affect your credit score. Avoid closing old credit card accounts, even if you don’t use them often. ",[4911],{"type":52,"attrs":4912},{"color":2847},{"type":139,"content":4914},[4915],{"type":41,"content":4916},[4917,4922,4931],{"text":4918,"type":45,"marks":4919},"Only open new credit accounts when necessary. Each time you apply for credit, it leads to a ",[4920],{"type":52,"attrs":4921},{"color":2847},{"text":4923,"type":45,"marks":4924},"hard inquiry",[4925,4928,4930],{"type":66,"attrs":4926},{"href":4927,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.badcredit.org/how-to/difference-between-hard-and-soft-credit-inquiries/",{"type":52,"attrs":4929},{"color":2847},{"type":76},{"text":4932,"type":45,"marks":4933}," on your credit report, temporarily lowering your credit score. Too many accounts can also lead to a temptation to overspend. ",[4934],{"type":52,"attrs":4935},{"color":2847},{"type":90,"attrs":4937,"content":4938},{"level":902},[4939],{"text":4940,"type":45,"marks":4941},"2. Use a lending marketplace",[4942],{"type":52,"attrs":4943},{"color":2847},{"type":41,"content":4945},[4946,4951,4958,4963,4971],{"text":4947,"type":45,"marks":4948},"Lending marketplaces, such as ",[4949],{"type":52,"attrs":4950},{"color":2847},{"text":2786,"type":45,"marks":4952},[4953,4955,4957],{"type":66,"attrs":4954},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":4956},{"color":2847},{"type":76},{"text":4959,"type":45,"marks":4960},", are online platforms that connect borrowers with loan offers from a wide network of investors and lenders. They offer an efficient way to shop for financial products and to discover the best personal loan for your financial needs. Plus, because ",[4961],{"type":52,"attrs":4962},{"color":2847},{"text":4964,"type":45,"marks":4965},"personal loan marketplaces",[4966,4968,4970],{"type":66,"attrs":4967},{"href":4161,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":4969},{"color":2847},{"type":76},{"text":4972,"type":45,"marks":4973}," facilitate competition among lenders, you’re more likely to secure a loan with a competitive interest rate. ",[4974],{"type":52,"attrs":4975},{"color":2847},{"type":41,"content":4977},[4978,4983,4992],{"text":4979,"type":45,"marks":4980},"Marketplaces are also useful for comparing options. They allow you to view interest rates, loan terms, origination fees, and other features all in one place. That side-by-side comparison can help you make sure you’re getting a good deal. Further, most marketplaces allow you to prequalify for multiple loans at once. ",[4981],{"type":52,"attrs":4982},{"color":2847},{"text":4984,"type":45,"marks":4985},"Prequalification",[4986,4989,4991],{"type":66,"attrs":4987},{"href":4988,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.experian.com/blogs/ask-experian/how-to-prequalify-for-loan/",{"type":52,"attrs":4990},{"color":2847},{"type":76},{"text":4993,"type":45,"marks":4994}," is usually fast, free, and won’t affect your credit score.",[4995],{"type":52,"attrs":4996},{"color":2847},{"type":90,"attrs":4998,"content":4999},{"level":902},[5000],{"text":5001,"type":45,"marks":5002},"3. Consider a cosigner",[5003],{"type":52,"attrs":5004},{"color":2847},{"type":41,"content":5006},[5007],{"text":5008,"type":45,"marks":5009},"A cosigner is an individual who agrees to take joint responsibility for the repayment of a loan alongside the primary borrower. When someone cosigns a loan, they are essentially offering a guarantee to the lender that if the primary borrower fails to make the required loan payments, the cosigner will step in and fulfill those obligations. ",[5010],{"type":52,"attrs":5011},{"color":2847},{"type":41,"content":5013},[5014],{"text":5015,"type":45,"marks":5016},"Getting a cosigner can be a good idea if your creditworthiness, income, credit score, or financial history don’t qualify you for a lower rate. When you apply for a personal loan with a cosigner, the lender considers the cosigner’s creditworthiness and financial stability in addition to your own. So, if you have a bad credit score but you cosign a loan with someone who has an excellent credit score, lenders will be much more likely to offer you a competitive rate because of the reduced risk associated with the loan. ",[5017],{"type":52,"attrs":5018},{"color":2847},{"type":90,"attrs":5020,"content":5021},{"level":902},[5022],{"text":5023,"type":45,"marks":5024},"4. Look for a lender with an alternative credit check",[5025],{"type":52,"attrs":5026},{"color":2847},{"type":41,"content":5028},[5029,5034,5043],{"text":5030,"type":45,"marks":5031},"When looking for lower interest rates, it’s worth exploring lenders that offer alternative eligibility checks. ",[5032],{"type":52,"attrs":5033},{"color":2847},{"text":5035,"type":45,"marks":5036},"Traditional lenders",[5037,5040,5042],{"type":66,"attrs":5038},{"href":5039,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/is-it-better-to-get-a-loan-through-your-bank/",{"type":52,"attrs":5041},{"color":2847},{"type":76},{"text":5044,"type":45,"marks":5045},", such as banks and credit unions, primarily rely on your credit history when assessing your ability to repay a loan. However, some alternative lenders consider factors beyond your traditional credit score. These may include:",[5046],{"type":52,"attrs":5047},{"color":2847},{"type":507,"content":5049},[5050,5059,5068,5077,5100],{"type":139,"content":5051},[5052],{"type":41,"content":5053},[5054],{"text":5055,"type":45,"marks":5056},"Your income stability and employment history.",[5057],{"type":52,"attrs":5058},{"color":2847},{"type":139,"content":5060},[5061],{"type":41,"content":5062},[5063],{"text":5064,"type":45,"marks":5065},"Bank statements, which can provide insights into your financial behavior.",[5066],{"type":52,"attrs":5067},{"color":2847},{"type":139,"content":5069},[5070],{"type":41,"content":5071},[5072],{"text":5073,"type":45,"marks":5074},"Payment history for non-credit accounts, such as rent, utilities, or subscriptions.",[5075],{"type":52,"attrs":5076},{"color":2847},{"type":139,"content":5078},[5079],{"type":41,"content":5080},[5081,5086,5095],{"text":5082,"type":45,"marks":5083},"Your assets, such as ",[5084],{"type":52,"attrs":5085},{"color":2847},{"text":5087,"type":45,"marks":5088},"savings accounts",[5089,5092,5094],{"type":66,"attrs":5090},{"href":5091,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/best-high-yield-savings-account/",{"type":52,"attrs":5093},{"color":2847},{"type":76},{"text":5096,"type":45,"marks":5097}," or investments. ",[5098],{"type":52,"attrs":5099},{"color":2847},{"type":139,"content":5101},[5102],{"type":41,"content":5103},[5104],{"text":5105,"type":45,"marks":5106},"Your debt-to-income ratio, i.e., the percentage of your income that you put towards debt repayment each month.",[5107],{"type":52,"attrs":5108},{"color":2847},{"type":90,"attrs":5110,"content":5111},{"level":902},[5112],{"text":5113,"type":45,"marks":5114},"5. Wait for national rates to fall",[5115],{"type":52,"attrs":5116},{"color":2847},{"type":41,"content":5118},[5119],{"text":5120,"type":45,"marks":5121},"If you take out a personal loan while national interest rates are high, you’ll end up paying more money in interest charges. You may be able to avoid this by delaying your personal loan application until national interest rates have decreased. This can both save you money over the life of the loan and make your monthly payments more affordable in the short term. ",[5122],{"type":52,"attrs":5123},{"color":2847},{"type":41,"content":5125},[5126],{"text":5127,"type":45,"marks":5128},"However, predicting interest rate hikes or dips can be complex. Your personal financial situation will also play a role in your timing. So, while it can be helpful to wait for rates to fall, make sure it doesn’t come at the expense of your immediate needs and plans. ",[5129],{"type":52,"attrs":5130},{"color":2847},{"type":90,"attrs":5132,"content":5133},{"level":92},[5134],{"text":5135,"type":45,"marks":5136},"Alternatives to a personal loan ",[5137],{"type":52,"attrs":5138},{"color":2847},{"type":41,"content":5140},[5141,5146,5154],{"text":5142,"type":45,"marks":5143},"While personal loans are a ",[5144],{"type":52,"attrs":5145},{"color":2847},{"text":5147,"type":45,"marks":5148},"popular and versatile option",[5149,5151,5153],{"type":66,"attrs":5150},{"href":3404,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":5152},{"color":2847},{"type":76},{"text":5155,"type":45,"marks":5156}," for getting your hands on some extra cash, they’re not the only route available. Here are some alternatives to consider. ",[5157],{"type":52,"attrs":5158},{"color":2847},{"type":90,"attrs":5160,"content":5161},{"level":902},[5162],{"text":5163,"type":45,"marks":5164},"Credit cards",[5165],{"type":52,"attrs":5166},{"color":2847},{"type":41,"content":5168},[5169,5177],{"text":5163,"type":45,"marks":5170},[5171,5174,5176],{"type":66,"attrs":5172},{"href":5173,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/how-many-credit-cards-should-i-have/",{"type":52,"attrs":5175},{"color":2847},{"type":76},{"text":5178,"type":45,"marks":5179}," may offer more flexibility and convenience than a personal loan. If you’re confident in your ability to repay your debt quickly and can secure a credit card with a low introductory interest rate, you may be able to put your near-term purchase on a card without having to worry about high personal loan interest rates. Just make sure you pay off the balance before the introductory period expires. Otherwise, you could face even higher interest charges than you’d get with a personal loan. ",[5180],{"type":52,"attrs":5181},{"color":2847},{"type":90,"attrs":5183,"content":5184},{"level":902},[5185],{"text":5186,"type":45,"marks":5187},"Home equity loan or home equity line of credit",[5188],{"type":52,"attrs":5189},{"color":2847},{"type":41,"content":5191},[5192,5201],{"text":5193,"type":45,"marks":5194},"Home equity loans",[5195,5198,5200],{"type":66,"attrs":5196},{"href":5197,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-home-equity-loan-en-106/",{"type":52,"attrs":5199},{"color":2847},{"type":76},{"text":5202,"type":45,"marks":5203},", sometimes called second mortgages, provide homeowners with quick access to a lump sum of money that they can then repay with interest. Home equity loans typically come with fixed rates. These loans are most useful for one-time expenses, like a home renovation or debt consolidation. ",[5204],{"type":52,"attrs":5205},{"color":2847},{"type":41,"content":5207},[5208,5213,5221],{"text":5209,"type":45,"marks":5210},"You may also want to consider a ",[5211],{"type":52,"attrs":5212},{"color":2847},{"text":5214,"type":45,"marks":5215},"home equity line of credit (HELOC)",[5216,5218,5220],{"type":66,"attrs":5217},{"href":3102,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":5219},{"color":2847},{"type":76},{"text":5222,"type":45,"marks":5223},", which is a revolving line of credit (similar to a credit card) with a variable interest rate. A variable interest rate is a type of interest rate that is not fixed over the life of a loan. Instead, it can change periodically, typically in response to fluctuations in a specified benchmark interest rate. ",[5224],{"type":52,"attrs":5225},{"color":2847},{"type":41,"content":5227},[5228],{"text":5229,"type":45,"marks":5230},"Home equity loans and lines of credit often come with lower interest rates than most personal loans. That’s because they are secured by your home’s equity. As another bonus, this interest may also be tax-deductible, depending on the purpose of the loan and your local tax laws. In contrast, personal loan interest payments are rarely tax deductible. Just keep in mind that, like a home equity loan, the lender can seize your home if you fail to repay a HELOC. ",[5231],{"type":52,"attrs":5232},{"color":2847},{"type":90,"attrs":5234,"content":5235},{"level":902},[5236],{"text":4430,"type":45,"marks":5237},[5238],{"type":52,"attrs":5239},{"color":2847},{"type":41,"content":5241},[5242],{"text":5243,"type":45,"marks":5244},"Peer-to-peer (P2P) lending involves borrowing from individuals or groups of individuals rather than traditional financial institutions like banks. Borrowers typically use online P2P lending platforms. Here, they can select from a variety of repayment terms and schedules, making it easier to find a loan that suits their specific needs. ",[5245],{"type":52,"attrs":5246},{"color":2847},{"type":90,"attrs":5248,"content":5249},{"level":902},[5250],{"text":5251,"type":45,"marks":5252},"Cash-out refinance",[5253],{"type":52,"attrs":5254},{"color":2847},{"type":41,"content":5256},[5257],{"text":5258,"type":45,"marks":5259},"A cash-out refinance is a popular type of mortgage refinancing option. It allows you to replace your existing mortgage with a new one that has a higher principal balance. You then receive the difference between the new mortgage balance and the old mortgage balance in cash. Since the average interest rates for mortgages are often lower than personal loan rates, homeowners can use this option to reduce their overall borrowing costs. ",[5260],{"type":52,"attrs":5261},{"color":2847},{"type":90,"attrs":5263,"content":5264},{"level":92},[5265],{"text":5266,"type":45,"marks":5267},"Compare personal loan rates on Navient Marketplace",[5268],{"type":52,"attrs":5269},{"color":2847},{"type":41,"content":5271},[5272,5277,5284,5289,5295,5303],{"text":5273,"type":45,"marks":5274},"A personal loan marketplace",[5275],{"type":52,"attrs":5276},{"color":2847},{"text":1260,"type":45,"marks":5278},[5279,5281,5282],{"type":48,"attrs":5280},{"class":1264},{"type":1264},{"type":52,"attrs":5283},{"color":2847},{"text":5285,"type":45,"marks":5286}," can help you make sure you’re getting the best loan for your needs. To streamline the process, Navient Marketplace offers a one-stop shop where borrowers can compare lenders,  get personalized loan rates, and access cash quickly and easily. Explore your loan options by",[5287],{"type":52,"attrs":5288},{"color":2847},{"text":1853,"type":45,"marks":5290},[5291,5293],{"type":66,"attrs":5292},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":5294},{"color":2847},{"text":5296,"type":45,"marks":5297},"visiting our marketplace today",[5298,5300,5302],{"type":66,"attrs":5299},{"href":639,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":5301},{"color":2847},{"type":76},{"text":4487,"type":45,"marks":5304},[5305],{"type":52,"attrs":5306},{"color":2847},{"type":41,"content":5308},[5309],{"text":755,"type":45,"marks":5310},[5311,5313],{"type":48,"attrs":5312},{"class":50},{"type":52,"attrs":5314},{"color":2847},{"type":41,"content":5316},[5317,5323],{"text":1260,"type":45,"marks":5318},[5319,5321],{"type":48,"attrs":5320},{"class":1264},{"type":52,"attrs":5322},{"color":2847},{"text":1386,"type":45,"marks":5324},[5325,5327],{"type":48,"attrs":5326},{"class":50},{"type":52,"attrs":5328},{"color":2847},{"type":41,"content":5330},[5331],{"text":3575,"type":45,"marks":5332},[5333,5335],{"type":48,"attrs":5334},{"class":50},{"type":52,"attrs":5336},{"color":2847},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798154\"}-->","https://www.marketplace.navient.com/blog/why-are-personal-loan-rates-so-high/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798154\"}-->","why-are-personal-loan-rates-so-high","navient_marketplace/blog/why-are-personal-loan-rates-so-high",[],"dea2bb5b-7094-45fb-9329-d2c31ffeea39","blog/why-are-personal-loan-rates-so-high/",[],{"name":5347,"created_at":5348,"published_at":5349,"updated_at":5350,"id":5351,"uuid":5352,"content":5353,"slug":5877,"full_slug":5878,"sort_by_date":69,"position":768,"tag_list":5879,"is_startpage":28,"parent_id":770,"meta_data":69,"group_id":5880,"first_published_at":2813,"release_id":69,"lang":773,"path":5881,"alternates":5882,"default_full_slug":69,"translated_slugs":69},"Should I buy a house or start a business?","2025-04-07T18:30:10.988Z","2025-12-26T13:45:00.962Z","2025-12-26T13:45:00.984Z",651798153,"ea8b16b5-8b11-4cd3-832a-23d19c662cca",{"seo":5354,"_uid":20,"hero":5357,"author":2834,"category":942,"featured":28,"imageAlt":18,"component":32,"blogContents":5362,"canonicalTag":5875,"publishedDate":764,"_editable":5876},{"_uid":15,"title":5355,"plugin":17,"og_image":18,"og_title":18,"description":5356,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Should I buy a house or start a business? | Navient Marketplace","Both options have unique perks, but this is a life-altering choice that will shape your financial future. Here’s what you need to consider.",[5358],{"id":18,"_uid":23,"image":5359,"intro":5356,"classes":18,"_editable":5360,"blogTitle":5347,"component":26,"imageLink":5361,"blendImage":28,"backgroundColor":29},"//a.storyblok.com/f/110029/5184x2920/bfb7a9110a/should-i-buy-a-house-or-start-a-business.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798153\"}-->","/images/should-i-buy-a-house-or-start-a-business.png",[5363],{"_uid":35,"color":36,"richText":5364,"_editable":5874,"component":762},{"type":38,"content":5365},[5366,5374,5381,5389,5396,5404,5425,5432,5461,5496,5504,5511,5587,5595,5615,5636,5657,5678,5686,5693,5714,5722,5738,5745,5752,5759,5767,5774,5781,5789,5796,5803,5810,5818,5825,5832,5839,5846,5866],{"type":41,"content":5367},[5368],{"text":44,"type":45,"marks":5369},[5370,5372],{"type":48,"attrs":5371},{"class":50},{"type":52,"attrs":5373},{"color":2847},{"type":41,"content":5375},[5376],{"text":5377,"type":45,"marks":5378},"If you’re trying to decide which financial goal to prioritize next, you might be asking yourself: should I buy a house or start a business? Both options have unique perks, but this is a life-altering choice that will shape your financial future, your day-to-day life, and your long-term goals. So, what should you do? Here’s what you need to consider.",[5379],{"type":52,"attrs":5380},{"color":54},{"type":90,"attrs":5382,"content":5383},{"level":92},[5384],{"text":5385,"type":45,"marks":5386},"Starting a business vs buying a home: 8 factors to consider ",[5387],{"type":52,"attrs":5388},{"color":54},{"type":41,"content":5390},[5391],{"text":5392,"type":45,"marks":5393},"Starting a business and buying a home are both decisions that will significantly impact your life, your finances, and your future prospects. Which one should you focus on first? Think about the following before you decide.",[5394],{"type":52,"attrs":5395},{"color":54},{"type":90,"attrs":5397,"content":5398},{"level":902},[5399],{"text":5400,"type":45,"marks":5401},"1. The market ",[5402],{"type":52,"attrs":5403},{"color":909},{"type":41,"content":5405},[5406,5411,5420],{"text":5407,"type":45,"marks":5408},"First, assess the state of the housing market. Is it a good time to buy a house now? Are interest rates, housing inventory, and local market conditions working in your favor? A strong buyer’s market may make it easier to negotiate a low purchase price, while a ",[5409],{"type":52,"attrs":5410},{"color":54},{"text":5412,"type":45,"marks":5413},"seller’s market",[5414,5417,5419],{"type":66,"attrs":5415},{"href":5416,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://myhome.freddiemac.com/blog/selling/what-sellers-market",{"type":52,"attrs":5418},{"color":74},{"type":76},{"text":5421,"type":45,"marks":5422}," may put you in a more challenging position.",[5423],{"type":52,"attrs":5424},{"color":54},{"type":41,"content":5426},[5427],{"text":5428,"type":45,"marks":5429},"If you’re leaning toward starting a business, consider the market demand for your product or service.",[5430],{"type":52,"attrs":5431},{"color":54},{"type":507,"content":5433},[5434,5443,5452],{"type":139,"content":5435},[5436],{"type":41,"content":5437},[5438],{"text":5439,"type":45,"marks":5440},"Is there a clear need for what your business offers, and is the market receptive to new entrants?",[5441],{"type":52,"attrs":5442},{"color":54},{"type":139,"content":5444},[5445],{"type":41,"content":5446},[5447],{"text":5448,"type":45,"marks":5449},"Is there a time-sensitive advantage to launching your business right now? ",[5450],{"type":52,"attrs":5451},{"color":54},{"type":139,"content":5453},[5454],{"type":41,"content":5455},[5456],{"text":5457,"type":45,"marks":5458},"Is there a trend or emerging niche that your business can capitalize on?",[5459],{"type":52,"attrs":5460},{"color":54},{"type":41,"content":5462},[5463,5468,5477,5482,5491],{"text":5464,"type":45,"marks":5465},"Stay informed about ",[5466],{"type":52,"attrs":5467},{"color":54},{"text":5469,"type":45,"marks":5470},"economic trends",[5471,5474,5476],{"type":66,"attrs":5472},{"href":5473,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.nar.realtor/research-and-statistics/housing-statistics",{"type":52,"attrs":5475},{"color":74},{"type":76},{"text":5478,"type":45,"marks":5479}," and market forecasts, too. In ",[5480],{"type":52,"attrs":5481},{"color":54},{"text":5483,"type":45,"marks":5484},"the housing market",[5485,5488,5490],{"type":66,"attrs":5486},{"href":5487,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://sgp.fas.org/crs/misc/IF11327.pdf",{"type":52,"attrs":5489},{"color":74},{"type":76},{"text":5492,"type":45,"marks":5493},", a strong economy might lead to rising house prices and make home ownership less affordable. In contrast, a robust economy can be good news for entrepreneurs: it often signals an increase in consumer spending. However, a strong economy can also result in higher operational costs. ",[5494],{"type":52,"attrs":5495},{"color":54},{"type":90,"attrs":5497,"content":5498},{"level":902},[5499],{"text":5500,"type":45,"marks":5501},"2. Your financial situation",[5502],{"type":52,"attrs":5503},{"color":909},{"type":41,"content":5505},[5506],{"text":5507,"type":45,"marks":5508},"Homeownership and business ownership each come with various costs, risks, and potential rewards. Be sure to analyze how each option would fit into your personal finances and consider speaking to a financial advisor. Especially consider the following factors: ",[5509],{"type":52,"attrs":5510},{"color":54},{"type":507,"content":5512},[5513,5528,5543,5558],{"type":139,"content":5514},[5515],{"type":41,"content":5516},[5517,5523],{"text":5518,"type":45,"marks":5519},"Down payment and mortgage: ",[5520,5521],{"type":98},{"type":52,"attrs":5522},{"color":54},{"text":5524,"type":45,"marks":5525},"In many cases, down payment and mortgage expenses can be substantial, especially in a competitive real estate market.",[5526],{"type":52,"attrs":5527},{"color":54},{"type":139,"content":5529},[5530],{"type":41,"content":5531},[5532,5538],{"text":5533,"type":45,"marks":5534},"Startup costs:",[5535,5536],{"type":98},{"type":52,"attrs":5537},{"color":54},{"text":5539,"type":45,"marks":5540}," In some cases, it costs less money to launch your own business than to buy a house first. This may be especially true if you’re launching a small business or an online business. When calculating potential upfront costs, be sure to consider expenses like product development, licensing fees, and marketing costs. ",[5541],{"type":52,"attrs":5542},{"color":54},{"type":139,"content":5544},[5545],{"type":41,"content":5546},[5547,5553],{"text":5548,"type":45,"marks":5549},"Short-term profitability: ",[5550,5551],{"type":98},{"type":52,"attrs":5552},{"color":54},{"text":5554,"type":45,"marks":5555},"Recognize that, in the short term, it may be challenging to turn a profit from a new business. Business ventures often require time to establish a customer base and generate a consistent income. This period of uncertainty can be financially challenging, especially if you haven’t saved up enough money to sustain your lifestyle during the early stages of your business. While it will also take time for your home to appreciate in value, your down payment provides some initial equity in the home.",[5556],{"type":52,"attrs":5557},{"color":54},{"type":139,"content":5559},[5560],{"type":41,"content":5561},[5562,5568,5573,5582],{"text":5563,"type":45,"marks":5564},"Debt and financing: ",[5565,5566],{"type":98},{"type":52,"attrs":5567},{"color":54},{"text":5569,"type":45,"marks":5570},"If you’re considering a mortgage, you’ll likely be taking on a significant amount of debt. Similarly, starting a business might involve loans or financing. Assess your willingness and capacity to manage and ",[5571],{"type":52,"attrs":5572},{"color":54},{"text":5574,"type":45,"marks":5575},"pay off debt",[5576,5579,5581],{"type":66,"attrs":5577},{"href":5578,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/how-to-pay-off-credit-card-debt-fast/",{"type":52,"attrs":5580},{"color":74},{"type":76},{"text":5583,"type":45,"marks":5584}," in either scenario. Which will be greater — a home loan or a business loan, and can you afford the payments?",[5585],{"type":52,"attrs":5586},{"color":54},{"type":90,"attrs":5588,"content":5589},{"level":902},[5590],{"text":5591,"type":45,"marks":5592},"3. Your financial goals",[5593],{"type":52,"attrs":5594},{"color":909},{"type":41,"content":5596},[5597,5602,5611],{"text":5598,"type":45,"marks":5599},"Becoming a homeowner is a significant milestone for many. However, building significant equity can take several years—if not decades. It’s also difficult to access that equity unless you end up needing to take out a ",[5600],{"type":52,"attrs":5601},{"color":54},{"text":5603,"type":45,"marks":5604},"Home Equity Line of Credit (HELOC) or a home equity loan",[5605,5608,5610],{"type":66,"attrs":5606},{"href":5607,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/home-equity-loan-vs-line-of-credit/",{"type":52,"attrs":5609},{"color":74},{"type":76},{"text":934,"type":45,"marks":5612},[5613],{"type":52,"attrs":5614},{"color":54},{"type":41,"content":5616},[5617,5622,5631],{"text":5618,"type":45,"marks":5619},"Assess your long-term ",[5620],{"type":52,"attrs":5621},{"color":54},{"text":5623,"type":45,"marks":5624},"personal finance",[5625,5628,5630],{"type":66,"attrs":5626},{"href":5627,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/what-is-personal-finance/",{"type":52,"attrs":5629},{"color":74},{"type":76},{"text":5632,"type":45,"marks":5633}," goals. If you want to prioritize long-term stability, buying a home can be a great option. However, if you’re looking for accelerated wealth accumulation and are comfortable with the entrepreneurial risks, a business might better align with your objectives. ",[5634],{"type":52,"attrs":5635},{"color":54},{"type":41,"content":5637},[5638,5643,5652],{"text":5639,"type":45,"marks":5640},"It’s also wise to consider the potential return on investment (ROI) of a business compared to a home. While homes historically appreciate in value over time, ",[5641],{"type":52,"attrs":5642},{"color":54},{"text":5644,"type":45,"marks":5645},"the ROI from a business",[5646,5649,5651],{"type":66,"attrs":5647},{"href":5648,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.kriya.co/knowledge-centre/calculating-the-return-on-investment-for-your-business",{"type":52,"attrs":5650},{"color":74},{"type":76},{"text":5653,"type":45,"marks":5654}," has the potential to be significantly higher. ",[5655],{"type":52,"attrs":5656},{"color":54},{"type":41,"content":5658},[5659,5664,5673],{"text":5660,"type":45,"marks":5661},"Businesses, particularly successful ones, can generate substantial returns, but they also come with greater risks and uncertainties. According to Bureau of Labor Statistics data, ",[5662],{"type":52,"attrs":5663},{"color":54},{"text":5665,"type":45,"marks":5666},"20 percent of small businesses fail",[5667,5670,5672],{"type":66,"attrs":5668},{"href":5669,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.entrepreneur.com/starting-a-business/the-true-failure-rate-of-small-businesses/361350",{"type":52,"attrs":5671},{"color":74},{"type":76},{"text":5674,"type":45,"marks":5675}," within the first year, and by the end of the decade, only 30 percent of those businesses will remain. ",[5676],{"type":52,"attrs":5677},{"color":54},{"type":90,"attrs":5679,"content":5680},{"level":902},[5681],{"text":5682,"type":45,"marks":5683},"4. Your appetite for risk",[5684],{"type":52,"attrs":5685},{"color":909},{"type":41,"content":5687},[5688],{"text":5689,"type":45,"marks":5690},"Purchasing residential property is generally considered a safe investment. That’s because real estate investing has a history of long-term value growth, and residential properties are tangible and appreciating assets. The housing market is less volatile than many other investment options, which can provide a sense of security if you have lower risk tolerance. ",[5691],{"type":52,"attrs":5692},{"color":54},{"type":41,"content":5694},[5695,5700,5709],{"text":5696,"type":45,"marks":5697},"Starting a business, however, involves higher risks. When you launch a business, you’re essentially gambling on yourself and your entrepreneurial abilities. The success of the business is closely tied to your personal decision-making and the market’s response to your products or services. Your business may experience several years of limited cash flow as you work to get it off the ground. Many entrepreneurs must rely on ",[5698],{"type":52,"attrs":5699},{"color":54},{"text":5701,"type":45,"marks":5702},"credit cards",[5703,5706,5708],{"type":66,"attrs":5704},{"href":5705,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://marketplace.navient.com/blog/how-to-choose-a-credit-card/",{"type":52,"attrs":5707},{"color":74},{"type":76},{"text":5710,"type":45,"marks":5711}," or loans to fund new startups. ",[5712],{"type":52,"attrs":5713},{"color":54},{"type":90,"attrs":5715,"content":5716},{"level":902},[5717],{"text":5718,"type":45,"marks":5719},"5. Your personal goals",[5720],{"type":52,"attrs":5721},{"color":909},{"type":41,"content":5723},[5724,5733],{"text":5725,"type":45,"marks":5726},"Three-quarters of Americans",[5727,5730,5732],{"type":66,"attrs":5728},{"href":5729,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.nytimes.com/2022/06/02/realestate/homeownership-affordability-survey.html",{"type":52,"attrs":5731},{"color":74},{"type":76},{"text":5734,"type":45,"marks":5735}," view owning their own home as a higher measure of achievement than having a successful career, raising a family, or earning a college degree. The sense of pride and accomplishment that comes from homeownership is unique and can contribute to your overall happiness. ",[5736],{"type":52,"attrs":5737},{"color":54},{"type":41,"content":5739},[5740],{"text":5741,"type":45,"marks":5742},"In contrast, building a successful business can provide a different kind of fulfillment. The journey of entrepreneurship offers the opportunity to see your ideas come to life and make a meaningful impact. ",[5743],{"type":52,"attrs":5744},{"color":54},{"type":41,"content":5746},[5747],{"text":5748,"type":45,"marks":5749},"Further, owning a business can provide a level of independence that homeownership can’t. As a business owner, you have the autonomy to make strategic decisions, set your own schedule, and pursue your entrepreneurial vision. This independence can be a driving force for individuals who value self-determination and creativity. ",[5750],{"type":52,"attrs":5751},{"color":54},{"type":41,"content":5753},[5754],{"text":5755,"type":45,"marks":5756},"Some individuals seek a balanced life with a comfortable home, while others are driven by the excitement and challenges of business ownership. Assess how each choice contributes to your personal well-being and life satisfaction. ",[5757],{"type":52,"attrs":5758},{"color":54},{"type":90,"attrs":5760,"content":5761},{"level":902},[5762],{"text":5763,"type":45,"marks":5764},"6. Time you’re willing to commit",[5765],{"type":52,"attrs":5766},{"color":909},{"type":41,"content":5768},[5769],{"text":5770,"type":45,"marks":5771},"Launching and running a successful business demands a substantial time investment. Entrepreneurship is a full-time job. Business owners often work long hours planning, marketing, and managing day-to-day operations. ",[5772],{"type":52,"attrs":5773},{"color":54},{"type":41,"content":5775},[5776],{"text":5777,"type":45,"marks":5778},"In contrast, buying a home typically requires less immediate time commitment. While the home-buying process can be intensive, it’s a one-time endeavor. Once you’ve secured your home, the time commitment is limited to maintenance and property management. ",[5779],{"type":52,"attrs":5780},{"color":54},{"type":90,"attrs":5782,"content":5783},{"level":902},[5784],{"text":5785,"type":45,"marks":5786},"7. Your lifestyle",[5787],{"type":52,"attrs":5788},{"color":909},{"type":41,"content":5790},[5791],{"text":5792,"type":45,"marks":5793},"Starting and running a business can offer a unique level of independence. As a business owner, you have the autonomy to make critical decisions, shape your company's direction, and create a work environment that aligns with your vision. ",[5794],{"type":52,"attrs":5795},{"color":54},{"type":41,"content":5797},[5798],{"text":5799,"type":45,"marks":5800},"Depending on the type of business, entrepreneurship can provide you with the flexibility to adapt to changing life priorities. Whether you want to spend more time with family, pursue personal interests, or explore new opportunities, owning a business can offer the flexibility to accommodate these shifts. ",[5801],{"type":52,"attrs":5802},{"color":54},{"type":41,"content":5804},[5805],{"text":5806,"type":45,"marks":5807},"On the other hand, homeownership ties you to a specific geographic area. When you purchase a home, you establish roots in a particular community. This could make it difficult to move or travel in the near future. However, it does make sense to lock down a home soon if you have a family or are planning to start one.",[5808],{"type":52,"attrs":5809},{"color":54},{"type":90,"attrs":5811,"content":5812},{"level":902},[5813],{"text":5814,"type":45,"marks":5815},"8. Your knowledge",[5816],{"type":52,"attrs":5817},{"color":909},{"type":41,"content":5819},[5820],{"text":5821,"type":45,"marks":5822},"Launching a successful business often requires a deep understanding of market dynamics, financial management, marketing, and business operations. If you lack the necessary knowledge, you may face a steep learning curve, which can be time-consuming and challenging. ",[5823],{"type":52,"attrs":5824},{"color":54},{"type":41,"content":5826},[5827],{"text":5828,"type":45,"marks":5829},"While homeownership also comes with responsibilities, the knowledge required is generally more straightforward. Furthermore, it’s often easier to learn about property maintenance, mortgage terms, insurance requirements, and local property regulations on the fly. You can also hire a real estate agent to help you quickly get up to speed. ",[5830],{"type":52,"attrs":5831},{"color":54},{"type":41,"content":5833},[5834],{"text":5835,"type":45,"marks":5836},"Before you make a decision, honestly assess your existing knowledge and your readiness to acquire new skills. ",[5837],{"type":52,"attrs":5838},{"color":54},{"type":90,"attrs":5840,"content":5841},{"level":92},[5842],{"text":3514,"type":45,"marks":5843},[5844],{"type":52,"attrs":5845},{"color":54},{"type":41,"content":5847},[5848,5853,5861],{"text":5849,"type":45,"marks":5850},"Owning a home and starting a business can both be fantastic next steps in your financial journey. However, as with all big goals, you may need some additional capital to get started. That’s where Navient Marketplace comes in. With Navient Marketplace, you can compare different lenders for free all in one place. Just enter a few details about yourself and ",[5851],{"type":52,"attrs":5852},{"color":54},{"text":5854,"type":45,"marks":5855},"get personalized results from lenders",[5856,5858,5860],{"type":66,"attrs":5857},{"href":4250,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":5859},{"color":74},{"type":76},{"text":5862,"type":45,"marks":5863}," in minutes.",[5864],{"type":52,"attrs":5865},{"color":54},{"type":41,"content":5867},[5868],{"text":755,"type":45,"marks":5869},[5870,5872],{"type":48,"attrs":5871},{"class":50},{"type":52,"attrs":5873},{"color":54},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798153\"}-->","https://www.marketplace.navient.com/blog/should-i-buy-a-house-or-start-a-business/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798153\"}-->","should-i-buy-a-house-or-start-a-business","navient_marketplace/blog/should-i-buy-a-house-or-start-a-business",[],"fe58d417-3dae-4083-899b-b79660a5c2e4","blog/should-i-buy-a-house-or-start-a-business/",[],{"name":5884,"created_at":5885,"published_at":5886,"updated_at":5887,"id":5888,"uuid":5889,"content":5890,"slug":6758,"full_slug":6759,"sort_by_date":69,"position":768,"tag_list":6760,"is_startpage":28,"parent_id":770,"meta_data":69,"group_id":6761,"first_published_at":2813,"release_id":69,"lang":773,"path":6762,"alternates":6763,"default_full_slug":69,"translated_slugs":69},"Should I take out a personal loan to start a business?","2025-04-07T18:30:09.389Z","2025-12-26T13:45:01.117Z","2025-12-26T13:45:01.144Z",651798152,"009400f4-09e7-470a-9e14-7f30c582d701",{"seo":5891,"_uid":20,"hero":5894,"author":2834,"category":942,"featured":28,"imageAlt":18,"component":32,"blogContents":5899,"canonicalTag":6756,"publishedDate":764,"_editable":6757},{"_uid":15,"title":5892,"plugin":17,"og_image":18,"og_title":18,"description":5893,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Should I take out a personal loan to start a business? | Navient Marketplace","The answer is a little complicated. Here’s when it’s wise to take out a personal loan for business, and the key aspects to consider before you do so.",[5895],{"id":18,"_uid":23,"image":5896,"intro":5893,"classes":18,"_editable":5897,"blogTitle":5884,"component":26,"imageLink":5898,"blendImage":28,"backgroundColor":29},"//a.storyblok.com/f/110029/8192x5461/de46e3a78a/should-i-take-out-a-personal-loan-to-start-a-business.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798152\"}-->","/images/should-i-take-out-a-personal-loan-to-start-a-business.png",[5900],{"_uid":35,"color":36,"richText":5901,"_editable":6755,"component":762},{"type":38,"content":5902},[5903,5911,5929,5937,5957,5964,5972,5979,5987,5994,6002,6009,6017,6024,6032,6039,6047,6054,6062,6069,6077,6126,6134,6183,6191,6198,6259,6267,6274,6291,6308,6338,6363,6371,6378,6395,6412,6429,6446,6463,6494,6502,6523,6530,6538,6545,6678,6685,6692,6724,6732,6747],{"type":41,"content":5904},[5905],{"text":44,"type":45,"marks":5906},[5907,5909],{"type":48,"attrs":5908},{"class":50},{"type":52,"attrs":5910},{"color":2847},{"type":41,"content":5912},[5913,5918,5924],{"text":5914,"type":45,"marks":5915},"Launching a new business can be both exciting and fulfilling, but it’s not always easy to secure the funding you may need. Small business loans are one option, but they can be tricky to get. If that’s been your experience, you may find yourself wondering — s",[5916],{"type":52,"attrs":5917},{"color":2847},{"text":5919,"type":45,"marks":5920},"hould I take out a personal loan to start a business?",[5921,5922],{"type":1488},{"type":52,"attrs":5923},{"color":2847},{"text":5925,"type":45,"marks":5926}," The answer is a little complicated. Here’s when it’s wise to take out a personal loan for business, and the key aspects to consider before you do so. ",[5927],{"type":52,"attrs":5928},{"color":2847},{"type":90,"attrs":5930,"content":5931},{"level":92},[5932],{"text":5933,"type":45,"marks":5934},"Can I use a personal loan to start a business?",[5935],{"type":52,"attrs":5936},{"color":2847},{"type":41,"content":5938},[5939,5944,5952],{"text":5940,"type":45,"marks":5941},"The short answer is that, yes, some lenders allow small business owners to use ",[5942],{"type":52,"attrs":5943},{"color":2847},{"text":5945,"type":45,"marks":5946},"personal loans",[5947,5949,5951],{"type":66,"attrs":5948},{"href":3383,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":5950},{"color":2847},{"type":76},{"text":5953,"type":45,"marks":5954}," to kickstart a new business. Getting a personal loan is often quick and easy, and this approach allows you to secure funds based on personal creditworthiness rather than having to provide proof of your business history or assets. ",[5955],{"type":52,"attrs":5956},{"color":2847},{"type":41,"content":5958},[5959],{"text":5960,"type":45,"marks":5961},"However, using a personal loan in this way involves merging your personal finances with your business finances. If your business faces challenges, you’ll also see your personal credit report take a hit. Also keep in mind that some lenders put restrictions on the way you can use personal loan funds. Not all financial institutions allow borrowers to use personal loans for commercial or business purposes. Be sure to review the loan terms beforehand to make certain. ",[5962],{"type":52,"attrs":5963},{"color":2847},{"type":90,"attrs":5965,"content":5966},{"level":92},[5967],{"text":5968,"type":45,"marks":5969},"Business loans vs. personal loans: what’s the difference? ",[5970],{"type":52,"attrs":5971},{"color":2847},{"type":41,"content":5973},[5974],{"text":5975,"type":45,"marks":5976},"With both personal and business loans, you’ll get a lump sum of cash, which you’ll then pay back over time with interest. However, there are key differences between each type of loan. ",[5977],{"type":52,"attrs":5978},{"color":2847},{"type":90,"attrs":5980,"content":5981},{"level":902},[5982],{"text":5983,"type":45,"marks":5984},"Purpose",[5985],{"type":52,"attrs":5986},{"color":2847},{"type":41,"content":5988},[5989],{"text":5990,"type":45,"marks":5991},"Personal loans are typically used for personal expenses like debt consolidation, home improvements, or major purchases. On the other hand, business loans are specifically designed to finance business-related expenses such as startup costs, equipment purchases, or working capital.",[5992],{"type":52,"attrs":5993},{"color":2847},{"type":90,"attrs":5995,"content":5996},{"level":902},[5997],{"text":5998,"type":45,"marks":5999},"Qualification requirements",[6000],{"type":52,"attrs":6001},{"color":2847},{"type":41,"content":6003},[6004],{"text":6005,"type":45,"marks":6006},"Personal loans are generally based on an individual's personal credit history, income, and debt-to-income ratio. In contrast, business loans take into account the creditworthiness and financial history of the business itself, including factors like business credit score, revenue, and length of time in operation.",[6007],{"type":52,"attrs":6008},{"color":2847},{"type":90,"attrs":6010,"content":6011},{"level":902},[6012],{"text":6013,"type":45,"marks":6014},"Loan terms and amounts",[6015],{"type":52,"attrs":6016},{"color":2847},{"type":41,"content":6018},[6019],{"text":6020,"type":45,"marks":6021},"Business loans typically offer higher loan amounts and longer repayment terms compared to personal loans, allowing businesses to access more substantial funding over an extended period. Personal loans, on the other hand, usually have smaller loan amounts and shorter repayment terms.",[6022],{"type":52,"attrs":6023},{"color":2847},{"type":90,"attrs":6025,"content":6026},{"level":902},[6027],{"text":6028,"type":45,"marks":6029},"Interest rates and fees",[6030],{"type":52,"attrs":6031},{"color":2847},{"type":41,"content":6033},[6034],{"text":6035,"type":45,"marks":6036},"Business loans may have lower interest rates than personal loans due to the reduced risk associated with a business's higher revenue potential. Also, business loans may come with specific fees related to business operations or loan administration. Personal loans, on the other hand, may have higher interest rates and fees due to the higher risk associated with individual borrowers.",[6037],{"type":52,"attrs":6038},{"color":2847},{"type":90,"attrs":6040,"content":6041},{"level":902},[6042],{"text":6043,"type":45,"marks":6044},"Liability",[6045],{"type":52,"attrs":6046},{"color":2847},{"type":41,"content":6048},[6049],{"text":6050,"type":45,"marks":6051},"When borrowing a business loan, the business is typically held responsible for repayment. This means that if the business is unable to repay the loan, the lender's recourse is limited to the business's assets. In contrast, with a personal loan, the borrower is personally liable, and both personal assets and credit can be at risk in case of default.",[6052],{"type":52,"attrs":6053},{"color":2847},{"type":90,"attrs":6055,"content":6056},{"level":92},[6057],{"text":6058,"type":45,"marks":6059},"Pros and cons of using a personal loan to start a business",[6060],{"type":52,"attrs":6061},{"color":2847},{"type":41,"content":6063},[6064],{"text":6065,"type":45,"marks":6066},"Deciding whether to use a personal loan to start a business requires careful consideration of the advantages and disadvantages. Here are some factors to consider:",[6067],{"type":52,"attrs":6068},{"color":2847},{"type":90,"attrs":6070,"content":6071},{"level":902},[6072],{"text":6073,"type":45,"marks":6074},"Pros of using a personal loan for starting a business:",[6075],{"type":52,"attrs":6076},{"color":2847},{"type":134,"attrs":6078,"content":6080},{"order":6079},{"order":136},[6081,6096,6111],{"type":139,"content":6082},[6083],{"type":41,"content":6084},[6085,6091],{"text":6086,"type":45,"marks":6087},"Accessibility",[6088,6089],{"type":98},{"type":52,"attrs":6090},{"color":2847},{"text":6092,"type":45,"marks":6093},": Personal loans may be easier to obtain than traditional business loans, especially for individuals who don't have an established business or business credit history.",[6094],{"type":52,"attrs":6095},{"color":2847},{"type":139,"content":6097},[6098],{"type":41,"content":6099},[6100,6106],{"text":6101,"type":45,"marks":6102},"Flexibility",[6103,6104],{"type":98},{"type":52,"attrs":6105},{"color":2847},{"text":6107,"type":45,"marks":6108},": Personal loans can generally be used for any purpose, including starting a business. This provides you with the flexibility to allocate the funds as needed for various business expenses.",[6109],{"type":52,"attrs":6110},{"color":2847},{"type":139,"content":6112},[6113],{"type":41,"content":6114},[6115,6121],{"text":6116,"type":45,"marks":6117},"Speed",[6118,6119],{"type":98},{"type":52,"attrs":6120},{"color":2847},{"text":6122,"type":45,"marks":6123},": When applying for a personal loan, it’s not unusual to be approved in a single business day. On the other hand, a U.S. Small Business Administration or SBA loan, for example, can take as little as 10-14 days, or as long as 60-90 days to be approved for. ",[6124],{"type":52,"attrs":6125},{"color":2847},{"type":90,"attrs":6127,"content":6128},{"level":902},[6129],{"text":6130,"type":45,"marks":6131},"Cons of using a personal loan for starting a business:",[6132],{"type":52,"attrs":6133},{"color":2847},{"type":134,"attrs":6135,"content":6137},{"order":6136},{"order":136},[6138,6153,6168],{"type":139,"content":6139},[6140],{"type":41,"content":6141},[6142,6148],{"text":6143,"type":45,"marks":6144},"Personal liability: ",[6145,6146],{"type":98},{"type":52,"attrs":6147},{"color":2847},{"text":6149,"type":45,"marks":6150},"When you use a personal loan for business purposes, you are personally responsible for the debt. This means that if your business fails, you are still obligated to repay the loan using your personal assets.",[6151],{"type":52,"attrs":6152},{"color":2847},{"type":139,"content":6154},[6155],{"type":41,"content":6156},[6157,6163],{"text":6158,"type":45,"marks":6159},"Higher interest rates:",[6160,6161],{"type":98},{"type":52,"attrs":6162},{"color":2847},{"text":6164,"type":45,"marks":6165}," Though you might be eligible for a low-rate personal loan, in general, business loans have lower interest rates. Taking out a personal loan to start a business can increase the overall cost of borrowing.",[6166],{"type":52,"attrs":6167},{"color":2847},{"type":139,"content":6169},[6170],{"type":41,"content":6171},[6172,6178],{"text":6173,"type":45,"marks":6174},"Limited loan amounts:",[6175,6176],{"type":98},{"type":52,"attrs":6177},{"color":2847},{"text":6179,"type":45,"marks":6180}," Personal loans don’t usually provide the same level of funding as business loans. Depending on the lender, you may be limited in the amount you can borrow, which could impact your ability to fully finance your business needs. ",[6181],{"type":52,"attrs":6182},{"color":2847},{"type":90,"attrs":6184,"content":6185},{"level":92},[6186],{"text":6187,"type":45,"marks":6188},"When does it make sense to borrow a personal loan instead of a business loan?",[6189],{"type":52,"attrs":6190},{"color":2847},{"type":41,"content":6192},[6193],{"text":6194,"type":45,"marks":6195},"Taking out a personal loan instead of a business loan can make sense in these situations:",[6196],{"type":52,"attrs":6197},{"color":2847},{"type":507,"content":6199},[6200,6215,6244],{"type":139,"content":6201},[6202],{"type":41,"content":6203},[6204,6210],{"text":6205,"type":45,"marks":6206},"You have limited business history:",[6207,6208],{"type":98},{"type":52,"attrs":6209},{"color":2847},{"text":6211,"type":45,"marks":6212}," If your business is in its early stages or lacks an established credit history, it may be challenging to secure a small business loan. In such cases, a personal loan might be more accessible.",[6213],{"type":52,"attrs":6214},{"color":2847},{"type":139,"content":6216},[6217],{"type":41,"content":6218},[6219,6225,6230,6239],{"text":6220,"type":45,"marks":6221},"You have strong personal credit: ",[6222,6223],{"type":98},{"type":52,"attrs":6224},{"color":2847},{"text":6226,"type":45,"marks":6227},"If you have an excellent personal credit score, but your business has relatively ",[6228],{"type":52,"attrs":6229},{"color":2847},{"text":6231,"type":45,"marks":6232},"bad credit",[6233,6236,6238],{"type":66,"attrs":6234},{"href":6235,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.sba.gov/business-guide/plan-your-business/establish-business-credit",{"type":52,"attrs":6237},{"color":2847},{"type":76},{"text":6240,"type":45,"marks":6241},", lenders may be more willing to extend a personal loan than a business loan. ",[6242],{"type":52,"attrs":6243},{"color":2847},{"type":139,"content":6245},[6246],{"type":41,"content":6247},[6248,6254],{"text":6249,"type":45,"marks":6250},"You need to move fast:",[6251,6252],{"type":98},{"type":52,"attrs":6253},{"color":2847},{"text":6255,"type":45,"marks":6256}," Personal loans, which are often available through nimble online lenders, often require less documentation and have quicker approval processes than business loans. That makes personal loans ideal for businesses operating on tight timelines. ",[6257],{"type":52,"attrs":6258},{"color":2847},{"type":90,"attrs":6260,"content":6261},{"level":92},[6262],{"text":6263,"type":45,"marks":6264},"What do you need to qualify for a personal loan?",[6265],{"type":52,"attrs":6266},{"color":2847},{"type":41,"content":6268},[6269],{"text":6270,"type":45,"marks":6271},"Specific eligibility requirements can vary among lenders. That said, you’ll likely need to have these things to secure a personal loan: ",[6272],{"type":52,"attrs":6273},{"color":2847},{"type":507,"content":6275},[6276],{"type":139,"content":6277},[6278],{"type":41,"content":6279},[6280,6286],{"text":6281,"type":45,"marks":6282},"Good credit history:",[6283,6284],{"type":98},{"type":52,"attrs":6285},{"color":2847},{"text":6287,"type":45,"marks":6288}," Personal loan lenders will issue a credit check before approving a loan. If you have a good credit score, you’ll have better chances of qualifying for a personal loan and may qualify for better interest rates. ",[6289],{"type":52,"attrs":6290},{"color":2847},{"type":507,"content":6292},[6293],{"type":139,"content":6294},[6295],{"type":41,"content":6296},[6297,6303],{"text":6298,"type":45,"marks":6299},"Stable income: ",[6300,6301],{"type":98},{"type":52,"attrs":6302},{"color":2847},{"text":6304,"type":45,"marks":6305},"Lenders typically look for a consistent and stable source of income. This assures them you have the financial capacity to repay the loan. ",[6306],{"type":52,"attrs":6307},{"color":2847},{"type":507,"content":6309},[6310],{"type":139,"content":6311},[6312],{"type":41,"content":6313},[6314,6320,6325,6333],{"text":6315,"type":45,"marks":6316},"Low debt-to-income ratio: ",[6317,6318],{"type":98},{"type":52,"attrs":6319},{"color":2847},{"text":6321,"type":45,"marks":6322},"The ",[6323],{"type":52,"attrs":6324},{"color":2847},{"text":6326,"type":45,"marks":6327},"debt-to-income (DTI) ratio",[6328,6330,6332],{"type":66,"attrs":6329},{"href":267,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":6331},{"color":2847},{"type":76},{"text":6334,"type":45,"marks":6335}," is the percentage of an individual’s gross monthly income allocated to debt repayment. A lower DTI indicates that you have sufficient income to cover your existing debts, along with the new loan. ",[6336],{"type":52,"attrs":6337},{"color":2847},{"type":507,"content":6339},[6340],{"type":139,"content":6341},[6342],{"type":41,"content":6343},[6344,6350,6358],{"text":6345,"type":45,"marks":6346},"Collateral: ",[6347,6348],{"type":98},{"type":52,"attrs":6349},{"color":2847},{"text":6351,"type":45,"marks":6352},"Secured loans",[6353,6355,6357],{"type":66,"attrs":6354},{"href":3714,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":6356},{"color":2847},{"type":76},{"text":6359,"type":45,"marks":6360}," may require you to put up collateral, such as a vehicle or savings account, to back the loan and reduce the risk for the lender. But if you go with an unsecured personal loan option, you shouldn’t need collateral. ",[6361],{"type":52,"attrs":6362},{"color":2847},{"type":90,"attrs":6364,"content":6365},{"level":92},[6366],{"text":6367,"type":45,"marks":6368},"What do you need to qualify for a business loan?",[6369],{"type":52,"attrs":6370},{"color":2847},{"type":41,"content":6372},[6373],{"text":6374,"type":45,"marks":6375},"If you meet the following eligibility criteria, you’ll likely qualify for a business loan: ",[6376],{"type":52,"attrs":6377},{"color":2847},{"type":507,"content":6379},[6380],{"type":139,"content":6381},[6382],{"type":41,"content":6383},[6384,6390],{"text":6385,"type":45,"marks":6386},"Business plan: ",[6387,6388],{"type":98},{"type":52,"attrs":6389},{"color":2847},{"text":6391,"type":45,"marks":6392},"Lenders often require a detailed business plan outlining your business model, target market, financial projections, and operational plans. ",[6393],{"type":52,"attrs":6394},{"color":2847},{"type":507,"content":6396},[6397],{"type":139,"content":6398},[6399],{"type":41,"content":6400},[6401,6407],{"text":6402,"type":45,"marks":6403},"Good credit history: ",[6404,6405],{"type":98},{"type":52,"attrs":6406},{"color":2847},{"text":6408,"type":45,"marks":6409},"As with personal loans, a good credit history is crucial. Both the business and the business owner’s credit may be evaluated. ",[6410],{"type":52,"attrs":6411},{"color":2847},{"type":507,"content":6413},[6414],{"type":139,"content":6415},[6416],{"type":41,"content":6417},[6418,6424],{"text":6419,"type":45,"marks":6420},"Financial statements:",[6421,6422],{"type":98},{"type":52,"attrs":6423},{"color":2847},{"text":6425,"type":45,"marks":6426}," You may need to submit your business’s financial statements — including income statements, balance sheets, and cash flow statements — to establish its financial health. ",[6427],{"type":52,"attrs":6428},{"color":2847},{"type":507,"content":6430},[6431],{"type":139,"content":6432},[6433],{"type":41,"content":6434},[6435,6441],{"text":6436,"type":45,"marks":6437},"Collateral:",[6438,6439],{"type":98},{"type":52,"attrs":6440},{"color":2847},{"text":6442,"type":45,"marks":6443}," Secured business loans may require collateral — such as business assets, real estate, or personal assets — to back the loan. ",[6444],{"type":52,"attrs":6445},{"color":2847},{"type":507,"content":6447},[6448],{"type":139,"content":6449},[6450],{"type":41,"content":6451},[6452,6458],{"text":6453,"type":45,"marks":6454},"Stability: ",[6455,6456],{"type":98},{"type":52,"attrs":6457},{"color":2847},{"text":6459,"type":45,"marks":6460},"Lenders often prefer businesses with a track record of stability and financial performance. As a result, it can be harder to secure funding for startups than for established businesses.",[6461],{"type":52,"attrs":6462},{"color":2847},{"type":507,"content":6464},[6465],{"type":139,"content":6466},[6467],{"type":41,"content":6468},[6469,6475,6480,6489],{"text":6470,"type":45,"marks":6471},"Personal guarantees: ",[6472,6473],{"type":98},{"type":52,"attrs":6474},{"color":2847},{"text":6476,"type":45,"marks":6477},"Entrepreneurs may need to ",[6478],{"type":52,"attrs":6479},{"color":2847},{"text":6481,"type":45,"marks":6482},"provide personal guarantees",[6483,6486,6488],{"type":66,"attrs":6484},{"href":6485,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.business.org/finance/loans/what-is-a-personal-guarantee/",{"type":52,"attrs":6487},{"color":2847},{"type":76},{"text":6490,"type":45,"marks":6491},", especially for small businesses or startups, making them personally responsible for the loan. ",[6492],{"type":52,"attrs":6493},{"color":2847},{"type":90,"attrs":6495,"content":6496},{"level":92},[6497],{"text":6498,"type":45,"marks":6499},"Are personal loans for business tax-deductible?",[6500],{"type":52,"attrs":6501},{"color":2847},{"type":41,"content":6503},[6504,6509,6518],{"text":6505,"type":45,"marks":6506},"If you take out a loan for business-related costs, the monthly payments are not tax deductible, but ",[6507],{"type":52,"attrs":6508},{"color":2847},{"text":6510,"type":45,"marks":6511},"the loan interest is",[6512,6515,6517],{"type":66,"attrs":6513},{"href":6514,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.sba.gov/blog/5-tax-rules-deducting-interest-payments",{"type":52,"attrs":6516},{"color":2847},{"type":76},{"text":6519,"type":45,"marks":6520},". This applies not only to large businesses but also to freelancers or consultants with side gigs. ",[6521],{"type":52,"attrs":6522},{"color":2847},{"type":41,"content":6524},[6525],{"text":6526,"type":45,"marks":6527},"For instance, paying interest on a loan used to buy supplies to create a product or furnish a rental property could be considered a business expense. Therefore, you can deduct it from your taxes. Keep in mind that if you use a personal loan for both personal and business needs, you can only deduct the interest related to the business portion. ",[6528],{"type":52,"attrs":6529},{"color":2847},{"type":90,"attrs":6531,"content":6532},{"level":92},[6533],{"text":6534,"type":45,"marks":6535},"Alternative funding sources for starting a business",[6536],{"type":52,"attrs":6537},{"color":2847},{"type":41,"content":6539},[6540],{"text":6541,"type":45,"marks":6542},"To avoid relying solely on loans, consider these funding options for your business: ",[6543],{"type":52,"attrs":6544},{"color":2847},{"type":507,"content":6546},[6547,6562,6603,6618,6633,6648,6663],{"type":139,"content":6548},[6549],{"type":41,"content":6550},[6551,6557],{"text":6552,"type":45,"marks":6553},"Bootstrapping: ",[6554,6555],{"type":98},{"type":52,"attrs":6556},{"color":2847},{"text":6558,"type":45,"marks":6559},"This is the classic DIY approach. It involves using your own savings and any revenue generated by the business to fund its growth. This way, you maintain full control without accumulating debt.",[6560],{"type":52,"attrs":6561},{"color":2847},{"type":139,"content":6563},[6564],{"type":41,"content":6565},[6566,6572,6577,6584,6589,6598],{"text":6567,"type":45,"marks":6568},"Business credit cards or lines of credit:",[6569,6570],{"type":98},{"type":52,"attrs":6571},{"color":2847},{"text":6573,"type":45,"marks":6574}," Like other ",[6575],{"type":52,"attrs":6576},{"color":2847},{"text":5701,"type":45,"marks":6578},[6579,6581,6583],{"type":66,"attrs":6580},{"href":5705,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":6582},{"color":2847},{"type":76},{"text":6585,"type":45,"marks":6586},", business credit cards offer a revolving credit line that allow you to make purchases up to a predetermined limit. That makes them ideal for day-to-day expenses. A business line of credit is a similar product, often available through banks and credit unions. A ",[6587],{"type":52,"attrs":6588},{"color":2847},{"text":6590,"type":45,"marks":6591},"line of credit",[6592,6595,6597],{"type":66,"attrs":6593},{"href":6594,"uuid":69,"anchor":69,"target":70,"linktype":71},"https://www.debt.org/credit/lines/",{"type":52,"attrs":6596},{"color":2847},{"type":76},{"text":6599,"type":45,"marks":6600}," gives you access to a set amount of capital that you can draw upon when needed.",[6601],{"type":52,"attrs":6602},{"color":2847},{"type":139,"content":6604},[6605],{"type":41,"content":6606},[6607,6613],{"text":6608,"type":45,"marks":6609},"Angel investors: ",[6610,6611],{"type":98},{"type":52,"attrs":6612},{"color":2847},{"text":6614,"type":45,"marks":6615},"Some individuals are interested in investing their money in promising startups. These “angel investors” often provide valuable mentorship and industry connections as well as capital. ",[6616],{"type":52,"attrs":6617},{"color":2847},{"type":139,"content":6619},[6620],{"type":41,"content":6621},[6622,6628],{"text":6623,"type":45,"marks":6624},"Venture capital: ",[6625,6626],{"type":98},{"type":52,"attrs":6627},{"color":2847},{"text":6629,"type":45,"marks":6630},"Aimed at high-growth startups, venture capital is a type of funding available from investment firms looking for substantial returns. In exchange for the cash injection, these firms typically take an equity stake in your business. ",[6631],{"type":52,"attrs":6632},{"color":2847},{"type":139,"content":6634},[6635],{"type":41,"content":6636},[6637,6643],{"text":6638,"type":45,"marks":6639},"Crowdfunding: ",[6640,6641],{"type":98},{"type":52,"attrs":6642},{"color":2847},{"text":6644,"type":45,"marks":6645},"It’s becoming more and more popular to use online platforms to raise small amounts of money from large numbers of people. It’s an excellent way to validate your business idea and build a community around it.",[6646],{"type":52,"attrs":6647},{"color":2847},{"type":139,"content":6649},[6650],{"type":41,"content":6651},[6652,6658],{"text":6653,"type":45,"marks":6654},"Grants: ",[6655,6656],{"type":98},{"type":52,"attrs":6657},{"color":2847},{"text":6659,"type":45,"marks":6660},"Some government agencies, non-profits, and corporations offer grants to support specific industries and types of businesses. Grants typically come with fewer strings attached than other financing options. ",[6661],{"type":52,"attrs":6662},{"color":2847},{"type":139,"content":6664},[6665],{"type":41,"content":6666},[6667,6673],{"text":6668,"type":45,"marks":6669},"Small business competitions:",[6670,6671],{"type":98},{"type":52,"attrs":6672},{"color":2847},{"text":6674,"type":45,"marks":6675}," Many organizations and universities organize competitions where startups pitch their ideas. Winners often gain access to cash prizes or business support services. ",[6676],{"type":52,"attrs":6677},{"color":2847},{"type":90,"attrs":6679,"content":6680},{"level":92},[6681],{"text":3514,"type":45,"marks":6682},[6683],{"type":52,"attrs":6684},{"color":2847},{"type":41,"content":6686},[6687],{"text":6688,"type":45,"marks":6689},"Having enough capital to operate and market your business can be the difference between success and failure. A personal loan can help you meet your business financing needs in the early days before the profits start rolling in. ",[6690],{"type":52,"attrs":6691},{"color":2847},{"type":41,"content":6693},[6694,6699,6706,6711,6719],{"text":6695,"type":45,"marks":6696},"With Navient Marketplace",[6697],{"type":52,"attrs":6698},{"color":2847},{"text":1260,"type":45,"marks":6700},[6701,6703,6704],{"type":48,"attrs":6702},{"class":1264},{"type":1264},{"type":52,"attrs":6705},{"color":2847},{"text":6707,"type":45,"marks":6708},", you can compare lenders for free all in one place. Just enter a few details about yourself and get personalized results from lenders in minutes. ",[6709],{"type":52,"attrs":6710},{"color":2847},{"text":6712,"type":45,"marks":6713},"Create a profile today",[6714,6716,6718],{"type":66,"attrs":6715},{"href":4250,"uuid":69,"anchor":69,"target":70,"linktype":71},{"type":52,"attrs":6717},{"color":2847},{"type":76},{"text":6720,"type":45,"marks":6721}," to discover how we can help you with your business needs. ",[6722],{"type":52,"attrs":6723},{"color":2847},{"type":41,"content":6725},[6726],{"text":755,"type":45,"marks":6727},[6728,6730],{"type":48,"attrs":6729},{"class":50},{"type":52,"attrs":6731},{"color":2847},{"type":41,"content":6733},[6734,6740],{"text":1260,"type":45,"marks":6735},[6736,6738],{"type":48,"attrs":6737},{"class":1264},{"type":52,"attrs":6739},{"color":2847},{"text":6741,"type":45,"marks":6742}," Navient customers are invited to consider personal loan offers through our partner MoneyLion. 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